Silver Stock Report #54

Silver Stocks–Comparative Valuations  
Report # 54
by Jason Hommel

Saturday, Feb 12, 2005 

This is the first complete Silver Stock Report since October, 2004.  Not all of the company profiles have been fully updated.  Those that have been updated, are in bold text.  ALWAYS do your own due diligence, research, on the companies profiled BEFORE you go out and buy them.  This first week, I mostly just updated the company profiles on the top list, not the bottom.  Next week, I will have more updates.

A day’s wage used to be a silver dime, a silver quarter, or maybe a silver dollar.  2000 years ago in Rome, a silver denarius was a day’s wage, and that coin was about the size of a silver dime, too.  Even as recent as 100 years ago, a silver dime was a day’s wage.   A silver dime today costs about 50 cents, at $7.20/oz. for silver.  If the world returns to using silver as money, that silver dime might be worth about $150 or more–which is what a day’s wage is in U.S. dollars today.  Thus, a $5000 investment in silver bullion today may be worth about $1.5 million, or more, in the future.

However, silver is more rare today that it has ever been.  For over 50 years, silver has been consumed in electronics, because silver is the greatest conductor of electricity known to man.  We still consume more than we produce.  About 900 million oz. of silver are consumed annually, and just under 600 million ounces mined annually.  Thus, there is is seven times as much refined gold as silver…  Buy real silver, it is scarce, real wealth, and cannot go to zero value, and I expect silver may rise in price nearly 300 fold, or more due to the insatiable industrial demand and the scarcity.  With that point of view, I began researching and investing in silver stocks, and this report is the fruit of my efforts, and the collective wisdom of the feedback I get from my readers.

This week’s report lists the market capitalizations for 86 silver stocks.  There are 31 silver stocks that list reserves, resources (and exploration potential) which I calculate by using my “ounce in the ground” formula.  There are 54 explorers.  There are about 30additional “silver” stocks with incomplete information.  This report goes out now to over 11,700 investors each week.  Additions & Changes from last week are in bold.  

Quick links to other areas in this report (Index of this report):  
[Summary list of Silver stocks]
[My Methodology
[Weekly Commentary
[Subscribe to the “look at my portfolio”. ($34/mo.)]
[Subscribe to my Private Placement notice list (FREE)]
[Subscribe to this Weekly Silver Stock Report (FREE)]
[My Conference Schedule
[General Commentary on Silver
[The money chart
[Disclaimers, Warnings, and Advice
[Company profiles]
[Company profiles with the most resources, and least cost
[Profiles of Explorers]
[19 Silver Stocks I own]
[Archive of about 40 of my past essays]
[Archive of past Silver Stock Reports]

Kitco reports silver at $7.17/oz. as of Saturday, 9AM West Coast US, which was used to calculate the following figures. The CAN $ / US $ conversion factor is .8087.  I will use .81 for ease.   

How to read the table below:  It starts on the left with:
The Stock Symbol that works at Yahoo! Finance (Company name) / The number that follows the company name, below, represents the company’s resources, divided by the market cap as denominated in silver; thus, it is the number of silver oz. “in ground” that you gain title to when you trade away one ounce of silver to buy 1 oz. of silver’s worth of stock.  The number is just one potential valuation method, in this case, an expression of leverage that silver stocks can give you, the higher the number, the better. / Next, I list the valuation price change since OCTOBER (and stock dilution, and resource changes, if any) as “up” or “down” or “even”.  / Finally, there are additional comments (EXPT is “exploration potential”)

Company names in bold have summaries below with updated information since the last report.  Click on the name to see the summary below.

This first list are the companies with information about reserves/resources/exploration potential.  The list is ordered/ranked based on the resource picture.  The most expensive (with the fewest silver resources given their market cap) are listed first.  Many of the bigger market cap companies, such as CDE, ABX, HL, BHP, Penoles, etc., are not listed here, because they are simply too expensive, based on their market capitalizations and resource ratio.

  1. FSR.TO FSLVF.PK (FIRST SILVER)   4.1 up  –producer, (not profitable ’03 3rd q.) unhedged, owns bullion
  2. GRS GAM.TO (GAMMON LAKE)            4.2 up –producer, owns 26% of Mexgold
  3. WTZ WTC.TO (WESTERN SILVER)        4.7 up  — (14 EXPT) large mine development cost. copper & zinc bonus
  4. MFN MFL.TO (MINEFINDERS)              5.2 even  –significant gold bonus, $35 mil cash on hand.
  5. * TM.V TUMIF.OB (TUMI RSCS)          5.4 down — (30 EXPT) recent bonanza grade silver discovery
  6. PAAS (PAN AMERICAN SILVER)                5.5 down  –large market cap, cash rich, producer. 
  7. ORM.V OREXF.PK (OREMEX RES)       7.9 even  (34 EXPT) —Discovery! 20 oz. of silver/T over 292 feet!
  8. FAN.TO FRLLF.PK (FARALLON RSCS)   8.0 up –(13 EXPT) low grades, silver 1/3; also gold & zinc bonus.
  9. * CFTN.PK (CLIFTON MINING)                  8.6 down — (205 EXPT) (order their colloidal silver now online 10% off)
  10. IAU.TO ITDXF.PK (INTREPID MINRLS)  9.8 NEW –exploring in Mexico & Argentina.
  11. SSRI SSO.V (SILVER STANDARD)            9.9 down –large company, many properties, owns silver bullion
  12. * PLE.V (PLEXMAR RES INC)                      9.7 up  (up to 23 EXPT?)–just acquired options on 2 new projects
  13. * IMR.V IMXPF.OB (IMA EXPL)           10.3 up –(38 EXPT) in Argentina 83 oz. of silver/T over 35 meters!
  14. CZN.TO CZICF.PK (CDN ZINC)             12.4 down  –large zinc bonus, high grades, low start up costs, great EXPT
  15. SHSH.PK (SHOSHONE SILVER)                   13.4 down  –leased properties; need payments; in Coeur d’Alene
  16. FR.V FMJRF.PK (FIRST MAJESTIC)         13.5 NEW (26 EXPT) –producer in Mexico.
  17. RDV.TO RDFVF.PK (REDCORP VEN)       18.1 up –60% gold bonus
  18. * SVL.V STVZF.PK (SILVERCREST)         18.6 up  –Silver in Mexico, 11.5 oz. of silver/T over 313 feet
  19. YZC.V (Yukon Zinc)                                18.7 up  –huge zinc bonus 60% zinc, 25% silver
  20. GGC.V GGCRF.PK (GENCO RECS)             20.3 up –producer in Mex.  Plans to expand and acquire
  21. CHD.V CHDSF.PK (CHARIOT RSCS)         21.8 down  –explorer, with inferred resources
  22. * SRLM.PK (STERLING MINING)                 22.4 down –(53 EXPT) acquired the Sunshine in Coeur d’Alene
  23. * CSG.TO CSGLF.PK (CAPSTONE GOLD)   23.8 up (88 EXPT) (In Mexico, resources are historical)
  24. HDA.V HUSIF.PK (HULDRA SILVER)           25.7 even   –very tiny, zinc bonus, low start up costs.
  25. * ABI.V ABMBF.PK  (ABCOURT MINES)   27 down –large zinc bonus, + existing infrastructure
  26. * MGN (MINES MGMT)                                 33.4 down  –60% copper bonus (low grades), start up cost ~ $250 mil
  27. * ASM.V ASGMF.PK (AVINO SILVER)      39.6 down –(25 if deal falls thru) to own 100% of the Avino mine 

* = I own shares

Next list: Exploration companies or producers with limited information on resources.  This list is in order (roughly) by market cap, the highest market cap companies are listed first.  THIS WEEK, I HAVE NOT UPDATED MANY OF THE COMPANIES BELOW.  I WILL GET TO THEM IN THE NEXT WEEK.

  1. MGR.V MGRSF.PK (MEXGOLD RSCS)       — bonanza grade discovery on Jan 13th, 2004
  2. CDY CDU.V (CARDERO RSCS)  –silver and iron explorer
  3. AOT.V ASOLF.PK (ASCOT RSCS) — owns percentage of Cardero, CDU.V
  4. * OTMN.PK (O.T. MINING)  very large exploration potential
  6. TVI.TO TVIPF.PK (TVI PACIFIC) –A PRODUCER of a dore silver bar 96% silver, 4% gold
  7. * MMGG.OB (METALLINE MINE) –zinc/silver (historic high grade silver) (low cost revolutionary oxide zinc process)
  8. MCAJF.PK (MACMIN LTD) –In Australia

This next list has silver exploration companies with market caps under about $30 million 
(Market cap = total number of shares fully diluted, times the share price.  It’s what the company is “worth” in the market place, given the stock price, and is one of the important numbers I calculate each week in these lists.)

  1. MAI.V MNEAF.OB (MINERA ANDES)  (gold bonus)
  4. * CBE.V CBEFF.PK (CABO MINING) –Historic Silver and Cobalt district
  5. SDR.V SDURF.PK (STROUD RSCS) (partners with Amerix) –in Mexico
  6. * APM.V  (Amerix Precious Metals Corp)(partners with Stroud) –in Mexico
  8. PXI.V  PNXPF.PK (Planet Exploration Inc.)

This next list has silver exploration companies with market caps under about $15 million

  7. * KRE.V KREKF.PK (KENRICH ESKAY)  –Near Eskay Creek
  10. * CMA.V CRMXF.OB (CREAM MINERALS) –Low grade, large “exploration potential” 

This next list has silver exploration companies with market caps under about $7 million dollars:

  3. GNG.V  GGTHF.PK (GOLDEN GOLIATH)  –Historic silver district in Mexico

This next list has silver exploration companies with market caps under about $5 million dollars: (The real “penny stocks” are those with the smallest market caps, not the lowest share price!)

  1. * PDO.V (PORTAL DE ORO RS)  –New Discoveries in Argentina
  3. ASLM.PK (AMER SILVER MINI)  — In Cour d’Alene
  6. * GRG.V (GOLDEN ARROW RESC)          IMR.V spin-off. 35 properties
  7. MTB.V (Mountain Boy Minerals Ltd)
  9. CLZ.V (Canasil Resources Inc)
  10. IPT.V IMPJF.PK (Impact Minerals) –  
  11. LSM.V LASCF.PK (Langis Silver & Cobalt Mining Co Ltd)

* = I own shares.  
There are expanded profiles on each company, way below.  But before I get to that, let me discuss my methodology, and the problems with it.

See the number above, listed after each company in the first list?  That number represents the number of silver ounces in the ground that you get when you buy an ounce of silver’s worth of stock.  The number treats all reported ounces in the ground as equal, however, they are NOT EQUAL.  Some ounces in the ground are more certain and others are more speculative.  Some are higher grades, some are lower grades.  Some have been well drilled, others have less drill results.  They range from most certain to least certain such as: “proven & probable reserves,” and then, “measured, indicated, or inferred resources.”   A reserve has a feasibility study produced for it.  A resource, does not.

Here’s the math on how I calculate that one number.  First, I get a market cap by multiplying the fully diluted shares (which bullishly assumes all options and warrants will be exercised and converted into outstanding shares) by the share price in U.S. dollars.  Next, I divide that by the silver price, so the market cap is denominated in terms of silver ounces.  Then, I divide the ounces in the ground by the market cap as denominated in silver.  This produces the single number of how many ounces of silver in the ground you are buying when you give up one ounce of silver in your hand, for shares of stock, instead.  This way, you can not only compare silver stocks to each other, you can compare them to silver directly.  This also helps people in other nations, using other currencies, to value these companies.

This valuation does not include zinc, or copper, or lead, but it does include gold at a 1:10 ratio of gold:silver.  At, they add 100% of proven & probable reserves, but only 70% of measured & indicated resources, and only 50% of inferred resources.  I don’t do that.  I count them as all the same.

I believe that the two most important numbers that a silver mining company can report are the resources in the ground, and the number of their fully diluted shares. Of course, there is much more to a mining company than that, but without those numbers, it is extremely difficult to even start an evaluation.  This report highlights those key numbers, where possible.  If you think those numbers are also important, please email the executives of the mining companies you own, and ask them to make sure their numbers are clearly published at their websites.

Problems with my methodology:  My methodology assumes that the more ounces in the ground, is, in theory, best, given that I expect much higher silver prices.  However, unless the price of silver really moves much higher, my methodology may not be the best one.  If silver does really move up very high in value as compared to today, then I expect my methodology to be one of the best predictors of rising stock values, because more ounces in the ground mean more leverage to rising silver prices.  However, the companies with greater leverage to the upside usually also tend to have greater leverage to the downside, and thus, tend to be more volitile.   

Other factors to consider that the single number produced by my methodology does not:  A resource calculation number does not tell you the entire picture about a company.  The resource calculation number is designed as a starting place for further research.  Other very important considerations are as follows:  How much existing mining infrastructure is in place?  The more the better, so think of it as a “bonus”.  How much cash does the comapany have on hand, and what is their burn rate?  What is the management’s attitude towards money, silver, hedging, debt, and dilution?  This is why I list “additional comments” in the company profiles, below.

I don’t consider grade to be too important (although I list it when I can), because I consider the cost to mine to be the more important consideration.  The “cost to mine” is determined in a feasibility study, which is the last thing produced before trying to raise money for final construction of a mine.  And usually, they cannot even count silver as a resource unless it is at least somewhat feasable to mine at today’s prices for silver.  And this is why I count all the ounces as the same.  If a low grade ore can be mined more cheaply, and if a higher grade ore costs more to extract, and if it has to be somewhat economically feasible even at these low silver prices to be counted, it balances out quite nicely. 

My methodology is the natural result of my study of the silver market and my religious views.  To read about my religious views, see my other web site, There are two essays near the top of the page that explain why I believe the entire world will return to using gold and silver as money again before the end times.  See Ezekiel 38.  Also, see my essay: Biblical Guidelines for Managing your Money

See my June 18, 2004 article: I’m insanely bullish on silver.

To quickly “tab” down to the company you are interested in, note the symbol. Then hit “control-F” to “FIND” the symbol below. 
If I use a word you don’t understand and is not listed in the dictionary at you can look up the meaning at

WEEKLY COMMENTARY (All new in this section):   

In general, I want to start out by saying that now is a particularly great time to buy into both the gold and silver markets.  As proof, please see

Then, copy and paste in the following 4 links:

Then, click on “view” for  Then, click on the Range, 2yr chart.  You can see that kitco’s traffic has dropped from a range of 800 viewers per million at the start of 2004, all the way down to about 400 viewers per million today.  That is a wonderful measure of reduced interest in precious metals by the general public.  

If you view the traffic for, it’s even more pronounced.  The range drops from 200 per million in mid 2003 to the end of 2003, and then drops down to about 50 per million today.  

Goldseek also shows a drop from about 60 people per million, down to about 40 per million, in the last year.

321gold also shows a drop from about 140 per million, down to about 40 per million, in the same time frame.

My own website, and this commentary, is not even on the map–it’s seen by so few people, comparatively speaking.

I’m very glad I’ve had time to produce this report again, but I was very busy with family matters, and with buying silver bullion, and with traveling to Vancouver for the last gold show.

I missed doing the calculations, as it really helps me make sense of the value of many of the stocks in the silver market.  Since the last report four months ago, many companies nearly doubled in price, while others saw their share prices nearly cut in half.  

I was extremely surprised by many of the changes between October and February in the last 4 months.  Many companies did private placements for very big money, and that really changes the valuations.  In the first list of companies in this report, in the last 4 months alone…

Gammon Lake raised $110 million in January.
Western Silver raised $64 million in December.
Farallon raised $20 million in January.
Canadian Zinc tried to raise another $10 million, but it was postponed.
Redcorp raised nearly $1 million in July.
Silvercrest raised nearly $3 million in December.
Yukon Zinc raised countless millions in several financings through the last few months, and thankfully, they put their number of fully diluted shares on the front page of their website.
Genco raised nearly $1 million.
Capstone raised about another $10 million.

This is very significant that this much big money is coming into our little silver sector–in only the last 4 months.  It shows that very big money is being attracted to silver, and that they want to participate in the expected run up in prices, and money talks.  This much money also has the potential to really move the silver bullion price.  The total of those financings is about $215 million.  The total silver in the registered category at the COMEX is 40 million ounces.  That, times $7/oz., is a mere $280 million!

Clearly, with such low investor interest by the public, and with such big money moving in, we are absolutely poised for a big run up in prices.

Personally, I like to buy stocks that have lagged, or have recently dropped in price.  This way, I know I’m getting them cheap.  It sounds fairly basic.  But it requires conviction on my part, which I have, to “buck the downwards trend” and buy a stock that has just hit a new bottom.  

I’ve successfully done this a few times in the last few years, and made good gains in the process.

But I have learned about one of the major reasons that can cause stocks to really drop for seemingly no good reason.  It often occurs when private placement shares become free trading.  Then, the large investors rush to sell after the hold time expires (usually 4 months) as they desperately try to “lock-in” a profit, and their large selling starts a downwards trend in the shares.  Very quickly, it may turn into panic selling in that one stock.  Other writers have described this process as if the market has to go through a process of digestion… to “absorb” these private placement shares.  

Since these private placements happen at different times, it causes wild fluctuations between silver stocks that create wonderful opportunities for adept individual traders, as you can maintain your full exposure to rising silver prices, AND trade an expensive silver stock for another one that just got much cheaper.

This is what I feel happened to Canadian Zinc a while back.  The company did a very large and oversubscribed financing at 50 cents in November, 2003.  Later, when these shares became free trading, the stock price took quite a hit as nearly $7 million worth of shares became free trading, and that “big money” tried to lock in their profits all by selling.  The stock price has yet to fully recover, although it manages to trade around $.60-$.70/share. But this kind of action also tends to create good liquidity, which is a very attractive thing for large traders who may now wish to buy.

Another stock went through a similar process: Sterling Mining.  Sterling Mining share prices have fallen recently as low as $3.70/share, from a high of nearly $13/share, and I finally decided to buy back in.  Today, Sterling Mining is already back up to $4.45/share, and I’m now sitting on a gain of about 20% for the week for that one trade.  Not too bad.

When private placement shares become free trading, it often creates a good buying opportunity, as well as provide the liquidity that allows a big player to buy, without pushing the price up.  Normally, it is very difficult to buy any of these thinly traded stocks without moving the price.

This brings me to discuss my relative size as a trader.  I will say that I’m responsible for trading multi-millions worth of dollars worth of silver stock.  Generally, when I participate in private placements, I don’t like to spend anything less than $50,000.00 because if I buy less than that, it hardly seems the trouble for me to go through the paperwork, and I’m very busy.  Sometimes, it’s very difficult for me to acquire $50,000 worth of stock on the open market, as I have with Avino, which is always difficult to buy even $10,000 worth at any one time.  I feel you should know about my size as a trader, so that you can understand my point of view.

There is another stock that I would like to tell you about, because I feel it is now cheap for the fundamental reasons discussed above.  A multi-million dollar private placement with a one year hold time that was done last year, just became free trading, and right now, market sentiment by the public is very low.  Clearly, this has created another wonderful opportunity, as the stock is down.  Normally, I would not tell you about this kind of an opportunity, because I would simply buy it first.  However, I already own the stock, and in rather large amounts.  It’s the 3rd largest stock holding in my portfolio of about 30 stocks, and it is about 5% of my overall portfolio.  I suppose, if I really started sacrificing other stocks, I could double my position, and get in cheap (below the price of prior insider buying).  However, if I did that, it would significantly reduce my portfolio diversification.  

And that is why I’m able to present this particular opportunity to you.

Now, here’s the really good details.  This stock’s fundamentals have tremendously improved over the last year–so I’m not eager to sell my private placement shares that just became free trading at these prices, (unlike some other people who bought in the private placement).  First, the company booted out their Joint Venture partner who missed a deadline (basically a technicality), to re-acquire the title to their property, 100%.  Second, they completed a very successful drill program, and found exactly what they were looking for, 4 billion pounds of zinc.  Third, the zinc price has really improved, up to $.58/lb, up from about $.35/lb. nearly 2 years ago.  And yet, the stock is now 50% off it’s previous highs!  If you want to know which stock this is, 
the 3rd largest stock holding in my portfolio, please sign up at to the “look at my portfolio”.

For all subscribers, please send a copy of your receipt (or a past copy of the “look at my portfolio”) to
 Only can issue you passwords.  I cannot.   Prior customers can also get a quick copy of the latest report if you email your receipt, (or a past copy of the “look at my portfolio”) to me here: (Neither I, nor my new support staff, has access to the prior goldismoney customer database, so please send your prior email recepts.) Not having access to the customer database was just one of the problems with my prior web service provider.

At the end of January, I attended the National Publicity Summit in New York.  I paid $5000 just to attend.  As a result, I paid a fee to land an hour long radio interview that went out on national radio.  See

To hear my hour long radio show on the internet, click here:
My show date is 2-12.  Or try clicking here:

Unfortunately, the end of the show was cut off.  I was saying that I find charts of the gold price useless as predictors of where the gold price will go, because charts contain no information about the fundamentals of how much paper money they have printed up.  
If you feel you may have missed an email from me, you can find the archives from my email signup page

The email sign up page:
The archive of past emails:


Now, months ago, somehow I managed to subscribe to “silver stocks” at news service.  Very little was on the actual topic.  Yet recently, one of the articles was here:

In that article, was the following question and answer:

Q: I have been thinking about buying some silver, but the price has been moving up so fast that I may have missed the boat. It is now well above $7 per ounce. This reminds me of the Hunt brothers and their failed silver gambit more than 20 years ago. What is going on in the market?

A: Some pundits attribute the recent increase in silver prices to stronger industrial production worldwide. Silver isn’t used only for jewelry. It also shows up in a large array of industrial products, notably in the electronics industry.

As with any financial development that has received a lot of publicity, you have to assume that the present price pretty well reflects silver’s prospects for the foreseeable future. I don’t know of anyone who can consistently and accurately predict the price of silver or any other investment.

However, if you think silver is underpriced, you can invest conservatively by buying silver coins or bullion. You can go a riskier route with stocks in silver-mining companies or mutual funds that invest in these stocks.

Or you can speculate whole hog in the futures market, where you can buy silver contracts on low margin, but you risk losing your entire investment in a day if the market moves against you.Moneybag appears three times a month in the Sunday Chronicle. Send questions to or to Arthur M. Louis, Moneybag column, 901 Mission St., San Francisco, CA 94103.

So, I wrote the following:

Arthur M. Louis, Moneybag column, 901 Mission St., San Francisco, CA 94103 

I read your answer to the investor on silver. 

   A: Some pundits attribute the recent increase in silver prices to 
   stronger industrial production worldwide. Silver isn’t used only for 
   jewelry. It also shows up in a large array of industrial products, 
   notably in the electronics industry. 

   “As with any financial development that has received a lot of 
   publicity, you have to assume that the present price pretty well 
   reflects silver’s prospects for the foreseeable future.” 

I do not think silver has gotten a lot of publicity.  Do you?  If silver has, then perhaps you already know the industry statistics? 
Such as the following: 
–Just under 600 million ounces produced by the mines annually. 
–Just over 900 million ounces consumed by industry, broken down as about 40-45% industrial, and the other two large areas of jewelry and photography. 
–The gap is met with about 200 mil oz. from recycling, mostly through recycling of photography. 
–The gap is also met with INVESTOR SELLING; selling from governments and/or private hoards, which are dwindling. 
–The silver left, above ground is estimated between 60 million ounces and 600 million ounces.  (Not including the Jewelry in India–but India is a silver importer) 
–Investor demand is a paltry 25 million ounces/year or less. 

Less than a billion dollars could purchase all the silver available at the COMEX. 

The COMEX has several serious position limits, as follows:  1.  A limit of 1500 contracts per entity per month, which is a limit of 7.5 million ounces.  But there is an optional delivery limit (not always imposed) of 1.5 million ounces! 
The other main places to buy physical silver are among the coin dealers in the U.S.  I have personally called about 20 of them, and found out that there are probably only 5 dealers in the U.S. with 100,000 ounces of silver bullion in inventory to sell. 

Silver is a very tight, very small market, measured in a few hundred million dollars. 

Potential monetary demand is huge, measured in the tens and hundreds of trillions. 

Respectfully, I ask whether or not you knew these facts about silver. 

Surely, you cannot think that silver has gotten a lot of publicity. 

And given that silver remains in a supply/demand deficit that can only be met through selling of pre-existing supplies that are nearly exhausted, you surely cannot rationally expect the silver price to remain at $7/oz., can you? 


Jason Hommel 

Arthur responded:

Thanks for your message to my Moneybag mailbox. What you say about silver is extremely interesting, and you clearly know worlds more about the subject than I do. Thanks for the education.                                                                         — Arthur M. LouisAnd I responded again:

I’m very happy to read this acknowledgement from you.  To me, it means a lot, and here’s why:

Like you, I have, at times, received far, far more email than I can respond to.  I have a list of about 12,000 people who subscribe to my weekly.  And that’s just the beginning of my marketing efforts over the last year.

I’m glad my letter peaked your curiosity, as it was intended to do.  Many people do regard me as an industry leader on the subject of silver, but I’m not.  I’m merely a marketer, but also an investor.  A wealthy investor, who knows a lot–especially for my age, 34…  The two groups who produce the industry studies on silver are the and the  Try there, maybe asking for interviews?  

Anyway, they produced some of the key the statistics that I shared with you.  

But they don’t speak of the COMEX limits, nor of the small dealer inventories, nor of the trillions of paper dollars out there.  And that helps to complete the picture.

Here’s also what I know…  There have been managers of $200 billion dollar funds… who have said things to their own internal research teams like, “silver looks good” let’s invest 4% of our fund into silver… but upon further reflection, and upon visiting the largest bullion dealers in the nation, realize the impossibility of doing that… as 4% of 200 bil is 8 billion!  and the silver bullion market is, as I said, in the mere hundred millions of dollars!!!

So, they end up walking away, with their tails between their legs… or something!…  but these are the guys who may invest in silver when it hits in excess of $30/oz., who will help take it to $100/oz.

Do I have your interest now???


Jason Hommel

I have not heard back from Arthur again.

From DAVID MORGAN of –which I subscribe to, and highly recommend that you do, too, if you are seriously following silver.  He’s worth the $100/year to me, by far, as he has helped me make tens of thousands of dollars.

A Brand New eTV program has been posted at


This educational program is all about the Commitment of Traders Report.

This requires high band width internet connections and will not function
properly on a dial up modem.

David explains the general structure of the COT reports, and how they usually change as the price of silver moves up and down.  It’s one way you might try to do some extra trading as the silver bull market develops.  It’s not my style to try and time when silver will move up or down, since the physical bullion that I hold would take me months both to acquire or sell, and also, there is generally a rather wide spread of about 5% to 10% in silver bullion.  Thus, I’m not really interested in doing all the physical work of moving all that silver to try and time the market.  Also, I fear delivery failures, which I think are coming, so I’d be too afraid to sell my silver at $8-$9/oz., regardless of what the COT structure is at that time.  Furthermore, my positions in many stocks are also so large that I can’t try to time the market, because often it would take me months to either buy or sell a single position–due to the lack of liquidity in the silver shares.  Also, if I did sell silver at $9, what else would I buy?  Certainly I would not be happy with holding fraudulent paper cash for a time.

However, I have been thinking about a strategy of holding gold if I think silver is getting a bit too high.  However, again, due to my overwhelming bullishness on silver, I would find it very difficult to try and time the market in this way.  What if I sold silver for gold as the ratio drops to 40:1, as silver gets relatively expensive given recent prices?  Say, for example, silver hits $10/oz, and gold prices stay the same.  Well, silver could continue all the way to 20:1, or even 10:1, and I would have missed out on the real opportunity that I believe, from my research, that is coming.  Although David may be right in the short term, I’m more interested in being right in the long term.  David and I agree on far more than we disagree, and David recommends holding a core position of physical bullion that you never trade.  Futures contracts, in David’s view, are something to do on the side, with a very small portion of your holdings.  And in my view, I would never trade them, on both a moral basis because I’m against gambling, and against leverage, and against paper promises that are greater than what I feel can be met.

From Franklin Sanders –another expert on silver–who is a silver bull, and recommends trading some silver for gold as the market develops.


It is finally ready, the silver trading manual I've been working on so long.
What does it cover?
* Arbitrage, the secret to greater profits.
* Paper silver or physical?
* Should I trade, or buy and hold?
* Why silver will outperform gold.
* Raging silver bulls.
* Refuting the croakers.
* Red herrings across silver's tracks.
* Silver to silver arbitrage.
* Silver coins or bars?
* Bimetallism -- not so stupid after all.
* Trading the gold/silver ratio, how and why.
I've tried to explain every opportunity you have to trade silver for silver
and silver for gold while you are holding metals through a bull market. My
goal is to double whatever profits you might make by simply buying and
holding, although obviously I can't guarantee that. I've kept it as simple
as possible, and have included twenty-nine (29) charts.
At retail, this manual is priced at $199, but ____________ subscribers can
order it through December 31, 2004 for just $49 plus $8.95 postage and
shipping ($15 overseas), a $161 discount. You can send us a check and order
by mail from Post Office Box 178, Westpoint, Tennessee 38486, or you can
call toll free (888) 218-9226 and charge it to a Visa or Mastercard. You
can talk to anyone who answers the phone. Just say you want 'Why Silver
Will Outperform Gold 400%."

The Moneychanger
P.O. Box 178
Westpoint, Tennessee 38486
(888) 218-9226; (931) 766-6066
Fax (931) 766-1128


My Conference Schedule:

I will be attending:
1. The 
PDAC in March 6-9 –I will not be speaking, just attending.
2.  The gold show in Chicago in the spring–2x a year. –I will be on a panel
3.  The 4 annual Cambridge House shows (I usually speak on silver for a 1/2 hour, both days, and maybe a panel)… see  The next is the Calgary Resource Investment Conference, April 10 & 11
4.  The show in Idaho again, the 3rd Silver Summit. –I’ll be speaking.
5.  GATA’s show in the fall.

To read about my religious views, see my other web site, There are two essays near the top of the page that explain why I believe the entire world will return to using gold and silver as money again before the end times.  See Ezekiel 38.  Also, see my essay: Biblical Guidelines for Managing your Money

Because I have a market reach, I also receive a lot of tips about silver stocks.  And thus, I believe I may have invested in some of the best ones that came my way.  If you believe I may have an edge based on my work and unique position… then the best way for me to share this with you is to is tell you more precisely where I put my money.  It’s not investment advice.  I offer a monthly “look at my portfolio”.   I do not issue recommendations, and I don’t list number of shares or the size of my portfolio, but I will show the top investments in my portfolio, by rank, updated monthly.  It includes which stocks are 9% and more of my portfolio, those between 9% and 6%, under 6%, under 3%, and under 1%.

To order, visit:
Price:  Monthly rebilling at $39.95. –most convenient, best customer service
Customer Service:
Toll Free Customer Service Hotline: 800-370-4154


Private Placement Opportunities for Sophisticated/Accredited investors: (This is not a solicitation for any stock, and I’m not brokering any securities) To be added to my PP email list, sign up at
Just select the second list from the drop down menu.


2 Silver Stock Funds

1.  Richard Greene, $100,000 minimum, 2 year hold, sophisticated/accredited investors only.  Will use margin, and/or short sell.

2.  Philip Judge or Simon Heapes,  Less than $5000 minimum?  No margin or shortselling.

General Commentary on Silver (slightly modified from last week):

Now, I think it’s time that the silver community started a letter writing campaign to the editors of newspapers around the world, to tell them about silver.  

Here is a sample letter:

May 21, 2004

Dear Editor,

I’m a silver investor.  I believe paper money is fraudulent.  There is over 30 trillion dollars, U.S., worth of bonds in the world, but less than 2 trillion dollars worth of gold, according to  

As of April, 2004, the size of M3, the money in U.S. banks, has reached 9.1 trillion dollars, yet due to fractional reserve banking, the total of U.S. currency and coin in circulation is only 724 billion dollars as reported by

At and, they each report that silver has been in a deficit for about 15 years, where world mine supply has been about 500 million ounces, scrap supply about 200 million ounces, and industrial and jewelry demand about 800 million ounces.  The difference, about 100 million ounces, has come from investor and government selling, drawing down reserves of silver.  Known supplies of refined silver are down to about 250 to 600 million ounces.   At the COMEX, they are down to 48 million ounces of silver left that is registered for delivery, which you can see at  

The governments of the world are printing up too much paper money, and the world is running out of real money, silver.  I believe this will lead to the price of silver rising dramatically in value, around the world. 

I urge your readers to verify the statistics I have provided, and to make their own decisions.


Jason Hommel

I wrote an article: 
Miners to Use Silver as Cash – 27 November 2003
Apparantly, I was about 6 months too early in my predictions, but that’s ok, I’m a very long term thinker and investor.  I did not miss the mark by too much time, and if you think in terms of decades, I was right on the mark.
There are several companies that are increasingly deciding to hold their cash in the form of silver bullion.  These companies are:


The Silver Valley in Idaho is bringing back the use of silver as money.  A silver one-ounce coin, a “Sterling” to be used as a $10 piece.

For news on the New Hampshire Sound Money Bill, that proposes to use U.S. Treasury minted Silver Eagles and Gold Eagles as money see:

25 Reasons why the Sound Money Bill Must Be Supported
by Jason Hommel

There are two excellent annual silver surveys that are sponsored by industry.

The survey by costs $195, 87 pages. — 8 page free summary of last year’s reeport.

The survey by costs $150, 162 pages. –3 page press release.

The two reports present the case that about 500 million oz. of silver are mined each year, about 200 million oz. of silver comes from scrap, and about 100 million oz. of silver comes from investor dis-hoarding, either by individuals or government sources, in order to meet the annual demand of about 800 million oz. of silver by industry & jewelry.  This is wildly bullish, because investors are net selling more than buying, and I think the potential of investor demand is huge, and can be measured by seeing how much paper money there is in the world.

Here are two U.S. Government produced reports on silver, containing data on years from 1900 to present, on U.S. & world  production, and U.S. consumption, and U.S. industry & government stockpiles.

Report #1
Report #2

I evaluated these government produced reports in my silver stock report #36.

In sum, we are running out of silver.  The U.S. government had over 3 billion ounces of silver in 1940, and today, has very little left, or none.


The Commodities Futures Trading Commission

The CFTC report on the allegations of manipulation in the silver market — 9 page report
The CFTC report confirmes much of the research above, and almost outlines the bullish case for silver!
–My comments on the CFTC report are in silver stock report #34 & #35

Silver consumption, per capita, in the U.S. is the same today, in 2004, as it was in 1945. 

And what is the per capita consumption of silver in the U.S. today?  5500 tonnes x 32152 = 177 million ounces of silver used per 285 million people.  177 / 285 = .62 oz. silver consumed per year, per person, in the U.S., whether in 1945, or in 2004.  Each person in the U.S. today, on average, uses 6 tenths of an ounce of silver.  

As the New York Times, January 11, 1859, page 2 said— 
“It is well known that the most colossal fortunes the world ever saw have been based on silver mines…” 
–quote found by Charles Savoie



My 2005-2010 price predictions for gold and silver: 
2005: $595/oz. gold,  50:1 ratio = $12/oz. silver
2006: $1011/oz. gold,  30:1 ratio = $34/oz. silver
2007: $1719/oz. gold,   10:1 ratio = $172/oz. silver
2008: $2923/oz. gold,  5:1 ratio = $ 585/oz. silver
2009: $4,969/oz. gold,  1:1 ratio = $4969/oz. silver
2010: $8448/oz. gold, 5:1 ratio = $1698/oz. silver
2011+: infinity dollars/oz. gold, infinity dollars/oz. silver.

I just moved up the years, one each from last year.  The reason why I’m so bullish is the scarcity of silver, and also, I believe one single billionaire could move the price, at any time, to $25/oz.  It would be folly of me to suggest that 2005 should see an average of $8-10/oz. for silver.  It could fly high, starting at any time.

I calculate the gold price rise by guessing that by 2010, M3 will have a “gold-value” like it did in 1980, which is to say, M3 was worth 2 Billion oz. of gold or less.  It also assumes M3 will about triple in that time.  These figures are conservative, because I see no reason that M3 should be valued more than the gold the U.S. actually holds, which is a mere 261 million oz., not billion.  Today, the M3 value is $8870 billion / $425/oz. = 19 billion oz. of gold M3 could buy in theory.  The silver:gold ratio is also a very, very vague guess, reflective of monetary demand chasing silver, which is more scarce than gold in above ground, refined form. I have no idea when the ratio of 15:1 will be exceeded, I’m just totally guessing.  I suppose it could happen this year or next month for all I know.  Of course my real price targets are infinity dollars per oz. for both gold and silver when all is said and done, I just don’t know how long that will take, nor what year it will be.  But my point in producing the price predictions is to show my bullishness for silver and gold.

A great overview on silver: Douglas Kanarowski’s 78 Approaching Forces For Higher Silver Prices

See also Douglas Kanarowski’s article:  What Impact Will Digital Photography Have on Silver?

Doug’s third article is also excellent: Silver — the next big thing in the global markets? Answering A Few Silver Questions


See the 600 year silver chart to see how undervalued silver really is:

Look at the summary of the world silver survey by GFMS Limited on behalf of The Silver Institute :

Note, there is virtually no monetary nor investment demand. Note, the 2002 mine production (585 mil oz.) is greatly exceeded by industrial, photo, and jewelry demand. (838 mil oz.).  Note the chart on page five, “Supply from above-ground stocks”.

The difference between mine supply and industrial demand was met by a combination of three factors: 1.  Government selling, 2.  Private selling, 3.  Recycling

U.S. government selling is ending, as their stocks have run out, or will run out.  This factor will reverse, because the U.S. government will need silver to continue their coin program, and/or need silver when they wake up and decide they need to replenish their strategic stockpile for domestic security.  Silver is a war material.  China’s selling of silver will also likely turn into buying, as China will need silver for continued industrial development, or when they also lose faith in the U.S. dollar.

Private selling has been rapidly shrinking and is now almost ended, and should turn into buying, and become monetary demand.  Monetary demand is everything in the silver supply / demand situation.  It’s not now.  Now, it’s nothing.  But it will become something incredible, because the dollar is dying.

The following is a “must read”:  Ted Butler’s best ever explanation of how silver is manipulated lower than it should be.

Over 3600 people have signed the silver petition to stop the manipulation at the COMEX:

Ted correctly points out that a lower price creates excessive demand from consumers.  However, Ted Butler does not point out, and neglects to mention, that a perpetually low price also creates lack of demand from investors who are “trend investors”.  

I think most silver experts over-analyze all the supply and demand factors of the silver market.  No factor is more important than monetary demand.  The force of photographic demand is like a light breeze compared to the hurricane or tornado of monetary demand.  Monetary demand is everything.

Consider the gold market for a moment:  Even short selling at the COMEX is nothing compared to monetary demand.  The short position most certainly helps to depress the price of gold as the short position is growing larger.  However, it adds fuel to the fire if there is short covering, and thus, it can boost the gold price later.  But the commercial short position on the COMEX is next to nothing compared to the non-reported “over the counter” trading that is done that does not appear on the COMEX.

(Numbers in metric tonnes, 32,152 oz. per tonne.)

870 tonnes — the paper position at the COMEX, 280,000 contracts for 100 oz. each.
5,000 tonnes — the official number admitted that the central banks have sold.
15,000 tonnes — the number GATA research shows that central banks have sold / or leased.
30,000 tonnes — the number of official central bank gold, minus either the 5000 or 15,000 tonnes.
145,000 tonnes — all the gold mined in the history of the world.
2,600 tonnes — annual mine supply
4,000 tonnes — annual demand

And all of that is nothing compared to the amount of dollars out there that exist that could buy gold. $20 trillion bonds, $9 trillion M3 = $29 Trillion.  A mere 1% is $290 Billion, which, at $500 /oz. is a massive demand of 18,039 tonnes.  Do you understand what that means?  That means that far, far less than 1% of dollars, in either bonds or M3 can buy gold, because there simply is not that much gold available.  

Long before 1% of U.S. paper dollars tries to buy gold, gold will be going up well over $1000/oz., and silver will be headed up over $50/oz. 

To scare away investors–that is the entire reason gold and silver are manipulated in the first place.  Only the trend investors can be deceived.  The problem is that nearly everyone is a trend investor.  Very few investors understand value.  If people knew the facts and used their brains, the available above-ground refined silver would be gone by tomorrow, and the price would be well over $20-50/oz.  But don’t trust me, check the numbers and follow the links:

“The money chart”

      1,000,000,000,000: 1 Trillion dollars
             1,000,000,000: 1 Billion dollars
                    1,000,000: 1 Million dollars
$200,000,000,000,000: Estimated total derivative exposure of all banks in the entire world. (20 x U.S. GDP)
$75,000,000,000,000: U.S. Govt. unfunded liabilities; social security, etc.
  $45,153,000,000,000: U.S. Household wealth, as of first quarter, 2004. (Includes Real Estate, and investments)
  $33,000,000,000,000: World bond market, yr end, ’01:
  $26,400,000,000,000: World stock market, June 2002:
  $20,200,000,000,000: U.S. bond market, yr end, ’02:
  $11,447,800,000,000: U.S. GDP, 2004 q1
  $11,300,000,000,000: NYSE U.S. stock market, April, ’04 (363 bill/s x $31.14/s ave.) (See: Market info: quick facts)
   $9,391,000,000,000: M3 (money in U.S. banks) Nov, ’04 
$7,595,000,000,000: US debt, 1-06-2005
   $2,360,000,000,000: U.S. annual budget 2005
   $1,860,000,000,000: World “official” gold mined in all of history, 145,000 T (4.6 bil oz.) @ $400/oz.
      $400,000,000,000: Estimated silver mined in all of history: 40 billion oz?  @ $10/oz. 
$738,000,000,000: Total U.S. paper currency & coin in circulation, Sept. ’04
      $700,000,000,000: Annual U.S. budget deficit (2004).  
      $700,000,000,000: Annual U.S. current account deficit (trade deficit) for 2004.
      $380,000,000,000: Market Cap of General Electric (biggest U.S. company)
      $290,000,000,000: Debt of General Motors (biggest U.S. car company) Jan 2005
      $164,700,000,000: Debt of Ford Motor Co. (2005) 
$109,600,000,000: US gold, 261 mil oz., @ $420/oz. 
      $100,000,000,000: all the world’s gold stocks/equities (estimated?)
        $75,000,000,000: Money flowed into Equity funds in the first quarter, 2004
        $18,000,000,000: Market Cap of Newmont Jan ’05 (biggest gold company in the world)
          $8,226,000,000: all the world’s “primary” silver stocks (80 of them on this list, as of June 25, 2004)
          $6,710,000,000: 671 mil oz. of “identifiable” silver bullion left in the entire world, according to GFMS @ $10/oz.
             $288,000,000: 40 mil oz. of “registered” COMEX silver bullion (1-05-05) @ $7.2/oz.

So, what do all those stastistics mean?

For a while I was using M3 and dividing that by the US gold (261 million ounces), which implies the us dollar is 84 times more valuable than it should be, and that gold should hit $34,000/oz. after the fraud is destroyed.  Today, I realize I need to add in the Bond market, because bonds are an asset class designed to siphon away and replace real money, which is to say, gold.  This gives a price of about $111,111/oz. for gold.  At $ 430/oz, this implies that US bonds and paper currency are 258 times more overvalued than gold.

Gold is overvalued relative to silver, because at current prices, it takes about 60 ounces of silver to buy 1 ounce of gold.  Historically, this ratio was 15 or 16.  Given the silver shortage, this ratio will hit 10:1 or 5:1, or even 1:1.  Thus, gold is perhaps 60 times more overvalued than silver.

Silver is overvalued relative to certain select silver stocks, perhaps by a factor of 3 or 10 or 20 to one. 

Thus, if you multiply all those numbers, 258 x 60 x 10,  You will see that bonds and currency are overvalued relative to select silver stocks by a factor of 154,800 to one. In other words, if silver stocks reach their true value, and paper currency disappears as it always does, then you might expect certain silver stocks to go up in relative value by a factor of 154,800 times more than they are worth today.  By that time, you should definitely sell the silver stocks, and buy gold.

Can silver stocks really appreciate so much? Is there historical evidence for such a crazy thing?  Yes. 

“CDE rose from penny stock status (.02 in 1967) to an NYSE-listed, $60 per share stock in 1980. In fact, the average share on the Spokane Stock Exchange rose in value nearly 16000% (yes, sixteen THOUSAND percent), as America could not get enough of silver and silver stocks.”

CDE rose by a factor of 3000, or 300,000%, and by 1980, the metals boom was stopped short, and paper money’s death was postponed.  If paper money dies a death that lasts a generation world-wide, then even greater gains should have been expected.

For this reason, a wise silver stock investor should NEVER sell silver stocks for paper cash.  A wise silver stock investor who looks for value would never sell a fairly valued silver stock for an overvalued silver stock that traded for hundreds of thousands of times more value than it should be.  Likewise, there is no excuse for a silver stock investor to have any cash or money market or bonds in his portfolio for any reasonable length of time, except for when selling one silver stock to raise the cash for another silver stock, or for when you need to raise the cash to buy silver, or a private placement in another silver stock.  

So, if you want some fairly liquid alternatives to cash, in case you don’t know what other silver stocks to buy at the time, here they are:
1.  Buy silver.  You can hold silver in an IRA.
2.  Buy CEF.  Central Fund of Canada, ticker symbol CEF.  It’s gold/silver bullion fund.  It has 50 oz. of silver for every 1 oz. of gold.  The fund is fairly liquid, you can buy it as easily as any other stock, and is a good cash substitute.  Unfortunately, given the current ratio, about 55% or more of the value is in gold.
3.  Buy a fairly large cap silver stock, with fairly large volume, that is stilll fairly cheap on the list.  Canadian Zinc, Sterling Mining, IMA Resources, and perhaps Mines Management and Cardero are probably the best five candidates.  These all have market caps ranging close to $50-$100 million dollars or more, and are more liquid than many others.  (I used to recommend PAAS and SSRI for this kind of “liquid alternative”, but they are no longer as cheap, and the others have now increased in liquidity, and are now much more suitable for this kind of trading.)


The sheer stupidity of big money not recognizing the value of the world’s remaining silver is utterly shocking to the rational mind.  Clearly, bond holders are utterly deceived, and totally unaware of the situation.  All my readers should understand and know that bonds were originally invented to suck the capital and money (gold and silver) away from the people.  Bonds today are a paper promise to repay paper.  What a con game!  Are bond holders conservative and safe?  No, they are fools!  There is nothing safe about holding a paper promise to receive more paper when we have been experiencing hyperinflation for the past two and a half years!  

See my prior essay, “ Inflation & Deflation During Hyperinflation ” 

And the fund investors who buy paper silver futures contracts instead of real silver are a very odd bunch of fools, for they should realize that nobody can deliver 800+ million ounces of silver promised in the paper contracts and options that does not exist.  It’s like the paper longs are betting on the bank run happening, but they all are making sure they get at the end of the long line.  Instead, they could go front and center, where there is an open window available where you can go and get physical silver, and nobody is there.  Idiots!  If you know a bank run is going to happen, and you are actually willing to bet on it, then go and withdraw your money before it is too late!  Don’t bet on it happening, which, if it does happen, your contracts will be defaulted on!  Amazingly blind idiots.  Wake up!

See also my prior essay, “The Moral Failures of the Paper Longs


How bullish am I on silver?  Here’s an interesting way to put it: “60 times infinity” dollars per ounce. 

I believe the dollar will eventually be destroyed, likely within my lifetime, hence the “infinity” part.  I believe the ratio of silver to gold may be equal during a spike, when the market realizes that above-ground refined silver is more rare than gold.  Thus, silver may outperform gold by a factor of 60 times better.  Currently, the ratio is 60 ounces of silver can buy one ounce of gold or 60:1. 

I may end up selling silver for gold, some at the 10:1 silver to gold ratio, some more at 5:1, and I would sell any silver remaining at a 1:1 ratio, that we may hit during a supply/demand crunch during a paper money collapse.

How we can tell if silver is leading gold, or if gold is leading silver?  IE, which is going up more, faster than the other?  The way you can tell is by looking at the ratio.  If the silver:gold ratio is going up (say, from 60:1 to 80:1), then gold is moving up faster (because it takes 5 more silver oz. to buy an oz. of gold.  If the ratio is going down (from 60:1 to 40:1), then silver is moving up faster.  So, keep an eye on the ratio. 

For a list of bullion dealers:

For a list of Brokers that handle Canadian issues and/or pink sheets:

To track the 163 ticker symbols of the 100+ stocks on this list at yahoo:  (Updated on April 2)

To learn All about Canadian law, 43-101, about reserves and resources:

A good web site that hosts posting boards for many of the smaller canadian stocks (that Yahoo! finance does not have boards for) is
Click on “Bullboards”.

This is a list of primary silver stocks.  

I count a company’s ounces of gold as 10 oz of silver. Why? Because I have a very strong positive bias in favor of silver over gold. 

Given my bias in favor of much, much higher silver prices, then, to me, the grades of silver are far less important than buying more oz. in the ground.  More oz. in the ground at a lower cost is the most important consideration for me.  

My method is simple. Cost per ounce in the ground. How much do you get (silver reserve totals), and how much does it cost (market cap)? The cost is the market cap divided by the silver reserve totals. Cheaper is better. Buy low, sell high.

Disclaimers, Warnings, and Advice: I have gathered the information below over the course of several months. I believe it is accurate to the best of my ability. I have made mistakes in the data from time to time. I’m human. I have collected the information from public sources such as company web sites and public information found at to get the stock prices. This report in no way guarantees the accuracy of the information below, since the information may change at any time. The number of outstanding shares can change as a company engages in new share issues to raise more capital through private placements, or if outstanding warrants (and options) are exercised and converted into shares, or if shares are bought back. Shares can be consolidated, or split. The number of ounces of silver in the ground can also change, as these are often only estimates. The number can also change up or down, depending on drilling results.

This report is not investment advice.  This report contains information that may or may not be up to date, and may be inaccurate.  I urge you to contact the company and do your own research to verify the information contained in this report.

This report is not an offer to buy or sell any securities.  I am not a broker.  Only your broker can buy or sell securities for you.

I urge you to consult with your investment advisor to determine whether these kinds of investments are right for you.  

I also caution you to be aware of your investment advisor’s advice, they are sometimes paid to push things like mutual funds, bonds and other securities that may not be in your best interest to buy.  Some investment houses are short physical metal, and thus, they may attempt to strongly discourage you from buying precious metal or precious metals investments.  I believe that the propaganda machine in support of frauds such as bonds and the dollar is so strong, that they may even believe what they say when they give bad advice to avoid the safety and protection of precious metals.  It is most likely that they simply do not understand the precious metals market as well as you do.

All total estimates of “ounces in the ground” can vary widely. There are “proven and probable reserves” which are the highest category of certainty which is obtained through many drill holes, and then at the least accurate, there are “inferred resources” which are hardest to estimate. Additionally, every miner always has “more silver properties that need to be explored, which probably contain more silver”. For the purposes of this report, I have added all those numbers together. It is believed that all these “ounce in the ground” estimates can be profitably mined at $5-6 per ounce silver, or lower. Thus, I believe that when silver trades for $15/oz. or above, that all of these ounces can be mined at a substantial profit. 

I may be wrong. (I probably make mistakes in every article, and there have been updates and corrections made each week, especially as prices change.)

Mining is a risky business. You need to be willing to sustain a total loss of your investment for various unforeseen accidents. Silver stock companies can do stupid things to shareholders such as take on debt, or issue more stock at too low prices which reduces the percentage of the company you may own (dilution). Yet, they need to issue shares to raise capital for drilling, and then an even bigger dilution to build a working mine. They may sell YOUR silver too cheaply, or worse, hedge the price of YOUR silver just as it begins to go up if they lock in a price which then proves to be too low if the dollar is destroyed. Mining is a risky business as estimates of assets in the ground can change. There is political risk and environmental risk. They can’t franchise the business, are stuck in one location, are subject to government confiscation, or taxes, or union wage negotiations, and corporate looting.

Do your own research.  Be responsible for your own investment decisions.  Again, please, before investing in a mining company, call up the company, and speak either with the CEO or the Investor Relations contact person. 

Contact the company.  Check the company web site, read the annual reports, check my numbers, check my math, and email the company. That’s what they are there for, to answer your questions, and to speak about the opportunity of the company. Don’t trust everything you read over the internet. I am a biased source. I own silver mining stocks. And I’m not a broker, nor an investment advisor. I’m just a private investor trying to make sense of this crazy world, and sharing my information and thoughts on silver companies. 

Beware of scammers.  Surely, there are scammers in the mining industry in the past, and there will be scammers in the future.  Remember the fraud of Bre-X.  The new 43-101 compliance laws put in place after Bre-X will not prevent a “certified” geologist from lying if he feels lying will create a better payoff.  The Bible warns, “trust no man”, yet at the same time advises us to “cast our bread upon the waters”, and to not issue “false allegations” against others.  Physical gold and silver provide the “payment in full” as long as the coins or bars themselves are genuine and not fake. 

This report may be copied, and transmitted by other people, and may become outdated by the time it reaches you.

I can’t tell you how you should invest your money, of course. The reason is that I don’t know how convinced you are of the silver bull market, nor do I know how soon you will be needing the money back, so I don’t know how long you can wait to see results, nor do I know how much liquidity you need. Nor do I know the size of the money you have to invest. It is very hard to invest large quantities of money in a small market cap stock. 

That being said, my investment strategy seems to be working for me, so far. And so, here is how I have started an initial valuation process of the following silver companies to guide my own investment decisions. 

(Market cap is always converted to US dollars and denominated in US dollars because I divide by ounces of silver, which are also denominated in dollars)

The Market Cap is the usual tool to value a company.  It is what the company “costs to buy” if you could buy the entire company, all the shares, at the latest share price.  It is calculated by multiplying the share price, by the total number of shares that the company has issued.  In reality, you could almost never buy an entire company at the price of the Market Cap, but only a small portion.  Usually, even small buying pressure, such as trying to buy 1% of a company, can push up the price of a stock by up to 10-50% higher.  In my reports, I list Market Cap in terms of millions of dollars as “$75 mil MC”.

To calculate the Market Cap, I try to get and use the number of “fully diluted shares”.  A company creates shares when they sell them to investors in what are called “private placements”, or “initial public offerings” (IPO).  These usually consist of shares and warrants, sold for cash that the company will need to grow and expand.

The “outstanding shares” is the number of shares that exist out there if you count them all, and it does not count the warrants, which are like options. The investor can “exercise the warrants” which is a right, but not an obligation, to buy more shares from the company at the set price of the warrant.

If the company does well, and the stock price moves up, all the warrants will be, or should be, exercised and converted into shares, especially if they become “in the money”, and the warrants are significantly cheaper than the stock price.

Now, “fully diluted shares” is the total number of shares, plus the warrants, counting warrants as if they were all exercised and became fully trading shares.  I think “fully diluted shares” is a better number to use to calculate market cap than by using “outstanding shares” as most do. 

Finally, I go beyond valuing a company based on Market Cap alone; instead, I value a company by dividing the Market Cap by the assets of the company, which are usually the silver reserves in the ground.  Thus, I can get a sense of what you are getting for what you are paying.   And then, I denominate the whole thing in terms of silver, and not dollars, to get a more constant measure.

(These first several companies below: 
BHP Billiton Ltd (BHP) 
KGHM Polska Miedz
Grupo Mexico SA de CV (GMBXF.PK)
Compania de Minas Buenaventura SA (BVN)
ABX (Barrick)

–all look to be way too expensive to buy for the silver exposure for your portfolio.  They are listed here, not because I want to cover them, but because there are many investors who will bring them to my attention if I neglect to mention them.  

BHP Billiton Ltd (BHP) IR
–‘produces 40 mil oz. silver annually from one mine’
Additional comments:  unfortunately, BHP has a 57 Billion market cap, so we can’t buy BHP for the silver exposure.  IE, $53 Billion / oh, say, 1000 million?????= $53/oz.

Dear BHP:  By all means, keep mining the silver if you want the silver exposure, and want to be in the silver business.  But don’t sell the silver.  Keep it.  Let the profits of your entire company accrue as an increasing physical supply of physical silver.  In fact, do as Buffett did, and buy more silver if you can.  It would be infinitely easier for you to buy silver from yourself than it would be to buy 40 million ounces of silver from the COMEX, which, today, might be impossible.  

169 mil shares fully diluted.
178 mil oz. reserves & resources
@ $3.31/share Cdn x .80 US/Cdn = $.59 US
$447 mil MC

Operating cash flow est. at $7/oz. = $30.4 million.
Annual Silver Production, 2005 est: 9.8 million ounces.

KGHM Polska Miedz
–KGHM is the world`s sixth-largest coppper producer and second or third in silver.
1163 tonnes of silver produced in 2001.
1163 x 32152oz.tonne = 37.4 million ounces of silver produced in 2001
–Copper/Silver mine in Poland.
–Market capitalisation is about  $$1.52 billion.

Grupo Mexico SA de CV (GMBXF.PK)
651,646,640 shares (2002 annual report)
@ $4.00/share
$2606 mil MC
“Grupo Mexico ranks as the world’s third largest copper producer (copper at $1.24), fourth largest producer of silver and fifth largest producer of zinc.”
They produced 28.2 million oz. of silver, worth $129 million, in 2002.  (P. 5, annual report.)
Total value of produced metals: $2527 milllion. (but the company lost money in 2002).  They mainly produce copper, 900,000 tons worth $1.5 billion in 2002.  Thus, silver, at 2002 prices, is only 5% of their production value.  Silver is a by-product for them, not a main product.
I don’t have silver reserve figures, nor do I see any need to find them or add them, since they are not a primary silver producer, and I don’t think anybody would be buying them for the “silver exposure”.
If we assume 280 mil oz. of silver (ten years reserve for production), then we stilll don’t have anything exciting for the silver alone.
$2085 mil MC / 280 = $7.45/oz. cost.

Compania de Minas Buenaventura SA (BVN) (IR)
– Peru´s largest publicly traded pprecious metals company 
–produces over 10 mil oz of silver per year
–looks way too expensive for the silver alone: 2.7 Billion market cap.

ABX (Barrick) (IR)
535 million shares outstanding (1 Q 2004)
@ $20.57/share
$11,004 million Market Cap
5.5 million oz. / year gold production.
–production hedged out for 3 years worth of total production, or about 15 million oz.  (most notorious hedger of the industry, the “leader”)
–price of hedges locked in near the market lows, perhaps $340/oz. on average, nobody knows for sure, because Barrick will not say
–reportedly, Barrick is trying to “unhedge”.
–reportedly, they plan to deliver 1/3 of production to hedges, which means they “might” be hedge free in about 10 years.
–the size of the hedge, 1 Q, 2004: 14.7 mil oz. gold, at $400/oz., would be valued at $5.9 billion dollars.  
–but they claim to be “debt free”, if you ignore the gold they owe for delivery, at locked in, low prices.  (only true if gold is not money)
–cash: $850 million
Silver Reserves reported to be 850 million ounces!  
Gold Reserves reported to be 86 million oz.  (x 10 = 860 mil oz. + 850 silver = 1710 mil oz. “silver equiv.”) 
$11,004 million Market Cap / 1710 mil oz. = $6.44/oz. silver
You may get “approx” 1.10 ounces in the ground for 1 oz. silver’s worth of stock, if the silver and gold was not hedged–but 30 mil oz of silver may be hedged.

Additional comments:  Barrick earns $26 million in first quarter.  x4 = $104 million, which gives a P/E ratio of 103.  Ouch, that’s high.  The hedge book loss was $10 million.  

Over the years, Barrick has hedged their production, which many claim has helped to depress the price of gold and silver, by artificially adding to supply.  (Barrick’s promises becoming the extra supply.)  The declining price of the precious metals has put other miners out of business, which Barrick has acquired at low prices.  If Barrick goes bankrupt due to their hedges, and rising gold and silver prices, then perhaps Barrick’s many properties will, once again, be sold at distressed prices.  

Around the spring of 2003, ABX made an announcement about covering 30 million ounces of silver they sold short.  Then, a large buyer showed up in the futures contracts for about that amount.  

1 Q 2004 note on hedging silver, p. 33:  “At March 31, 2004, we had fixed-price commitments to deliver 22.3 million ounces of silver over periods primarily of up to 10 years.  We also had written silver call options on a notional 7 million ounces of silver with an average exercise price of $5.76 per ounce.  These options expire at various dates in 2004 and 2005.  The options are classified as non-hedge derivatives for accounting purposes.  Looks like they never closed out the silver hedge, but that they just bought options or futures that expired.

I expect silver bullion to continue to outperform ABX stock at these prices.   I don’t really count Barrick as a silver company… Let me be abundantly clear.  I primarily list Barrick to show how poorly it compares to all the rest, and to help show how much better the rest compare.  This is a “comparative valuations” report, after all.

397.5 mil shares outstanding (2003 annual, unchanged since 2001)
@ $4.75/share
$1888 mil MC
419 proven and probable reserves of silver (from 2002 annual report on web site)
$1888 mil MC / 419 oz. silver = $4.51/oz.
You get “approx” 1.57 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments:  Industrias Penoles is the world’s top producer of refined silver.  They actually derrive more revenue from silver than any other source.  But they lost money in 2002.  Produced 21.5 mil oz. silver 1 Q 2004 (Net earnings of $342.5 million 1 Q 2004)

The word late Feb. 2004 from ECU Mini, who reported to, is that Penoles hedged silver at low prices.  As reported at, “We know the market is so tight even the world’s largest silver producer, Mexico’s Penolas, wasn’t thrilled about supplying 1 million ounces for a special project with ECU Silver, led by their extremely able CEO Michel Roy.”

From 2003 annual statement, by Dec 31, 2003, Penoles hedged 1.5 million ounces of silver at $5.31/oz.  That looks to be a bad bet, but easily coverable for Penoles.  They bought an option to sell (put) 17 million ounces of silver at 4.94.  Another bad bet.  Totally wasted money, it appears to me.  They also have an option to buy 8.5 million ounces (call) at $5.53.  Not bad.  Such hedging practices, win or lose, make it more difficult for investors to know and guess the current operational state of the company.  Who knows whether Penoles will lock in more silver, and take away the upside potential profitability for shareholders, or even waste money on put options that will never be exercised.

Whether Penoles hedged an entire 2 years worth of production by Feb, 2004, I don’t know, and remains to be seen.  Penoles also engages in hedging dollars in the foreign exchane markets, further complicating matters.

77 million oz. silver refined by the metals division in 2003, and 1 mil oz. gold.
They probably refine almost all the silver that comes out of Mexico.
They produce about 48 mil oz. of silver from their mines 2003, and they have expansion plans.  

I’ve heard this stock is tightly held, most is family owned.  

Their oz. numbers are “proven & probable reserves”, which is much more certain than most of the others which are mostly “inferred and indicated resources.”  They undoubtedly have “inferred and indicated resources” in addition to the “proven & probable reserves,” I just could not find any info on that at the web site or in the annual report.  There is no need for a Mexican company to comply with Canadian law, 43-101.  When CDE recently complied with 43-101, they raised their total numbers by about 30-50%?

Given the report in March, 2004, that Penoles has hedged silver for two years, I expect silver bullion to continue to outperform IPOAF.PK stock at these prices.

(COEUR D’ALENE) (208) 769-8155 or (800) 624-2824
214 mil shares outstanding (June 2004) not fully diluted
@ $4.44/share 
$950 mil MC
“Current cash, cash equivalents and short-term investments stand at approximately $252.7 million at January 31, 2004, giving effect to recent $180 million offering of 1.25% Senior Convertible Notes due 2024, net of offering costs.”
July 15th, 2004:  Cour Presents Resources in Cdn 43-101 form:
Total of proven & probable reserves: 175 mil oz. silver, 1.4 mil oz. gold.  Total silver equiv: 189 mil oz.
Total of measured, indicated, and inferred resources:  76 mil oz. silver, 1.4 mil oz. gold.  Total silver equiv: 90 mil oz.
(43-101 reporting increased the number from 189 mil to 279 mil oz. silver).  Before, Cour only reported reserves.)
(Produced 14.2 mil oz. silver in latest fiscal year (early 2004)
$950 mil MC / 279 mil oz = $3.41/oz.
You get “approx” 2.08 ounces in the ground for 1 oz. silver’s worth of stock. 

Additional comments: CDE’s page on silver, “The Value of Silver” says nothing about silver as money.  Unbelievable!

Wheaton recommends rejecting the CDE buy out offer:
Wheaton Does not Intend to Pursue the Coeur D’alene Mines Proposal: Recommends Shareholders Vote IAMGold Combination
Monday May 31
Interestingly, as one reason, Wheaton says: CDE has a history of losses and negative operating cash flow.

Quarterly Loss Reduced From $31.2 Million a Year Ago to Just $3.0 Million in 2004’s First Quarter
As of May 5th, CDE announced: No silver or gold hedge positions in place.

For the full year 2003, the Company reported a net loss of $67.0 million, or $0.40 per share, compared to a net loss of $81.2 million, or $1.04 per share in 2002.

Why does CDE continue to mine and sell silver at a loss?  Why has CDE borrowed $180 million to continue expanding this business plan?  Why couldn’t CDE have raised the money from issuing more shares?  Why has CDE stock increased over seven times from about 30 million shares outstanding at the end of 1999 to 214 million shares outstanding by the first quarter 2004?  How was CDE able to secure such favorable terms for a loan? “giving effect to recent $180 million offering of 1.25% Senior Convertible Notes due 2024, net of offering costs.”” Who did CDE borrow money from?  Who stants to gain if CDE continues to produce silver at a loss?  

If CDE produced silver at a loss during the first quarter 2004, how much money will they make if silver hits $10/oz?  Perhaps the break-even price for production is a constant $8.00/oz.?  Regardless of their “cash cost” numbers.  If so, and if CDE produces 15 million oz. of silver per year, then at $10/oz., CDE may make up to $30 million dollars, at the most, from their silver production, if none of their other costs like energy costs rise in price due to inflation.  Mining uses a lot of energy, just so that you know, so I don’t think it is likely that CDE will have profits even with higher silver prices in the $8-10 range due to inflation.   Given that CDE has a market cap of up to $1000 million dollars, CDE just is not worth it at all, in my opinion.  And neither would CDE stock be worth the price if they had a market cap of $300 million, in my opinion.  I would rather own silver, as it moved in price from $6 to $10.  And in the meantime, CDE may well move in price from $6.49/share down to $2.16/share (assuming no further dilution, and a reduction to a more reasonable $333 million market cap), and by then, with silver at $10, CDE may have a P/E ratio of 10, and a huge heavy debt load of $180 million dollars that may take up to 6 years of possible profits to pay off.  

At $2.16/share, $10 silver, and a P/E of 10: $333 mil MC / 189 mil oz. = $1.76/oz.  = You’d get about 5.68 oz. of silver for each silver oz. worth of stock.

There is one very important factor that CDE investors need to consider, especially if they are hoping that the stock will return to a historic price.  CDE stock prices, in my opinion, are highly unlikely to return to historic prices.  And why?  Because of the recent massive dilution.  At the end of 1999, there were 30 million shares out.  Today, there are 214 million.  You MUST take that information into account when looking at a long-term historical price chart.  For example, the price in 1996 was $20/share, but there were less than 30 million shares?  If so, then the market cap was $600 million ($20/share x 30 million shares).  Today, the market cap typically exceeds the previous historic price of $20/share and $600 mil MC!  $3.63/share x 214 mil shares = $777 mil MC, which shows that CDE is more expensive today at $3.63/share ($777 mil MC) than it was at $20/share ($600 mil MC).

I expect silver bullion to continue to outperform CDE stock at these prices.

SIL (APEX SILVER) (303) 839-5060 
47.4 million shares outstanding (late May, 2004) (not fully diluted?)
(derived from share price & market cap, late May, 2004)
@ $19.14/share
$907 mil MC
cash on hand: ~ $490 million October 2004
San Cristobal (Bolivia) (proven & probably reserves) 454 mil silver
(The revised capital cost estimate amounted to $560 million)
(Produced zero silver in 2002)
7.8 billion pounds of zinc, and 2.9 billion pounds of lead
$907 mil MC / 454 mil oz = $1.99/oz.
You get “approx” 3.54 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments:  Apex Silver Completes the Sale of $100 Million 4.0% Convertible Senior Subordinated Notes Due 2024
Friday October 15

Apex’s webpage on silver, “Commodity Fundamentals” says nothing about silver as money.  Unbelievable and shameful!  Unless you count this phrase, “As a precious metal, it has been a source of human adornment since the beginning of time.”  At least they recognize that silver is a precious metal, and at least they recognize it has been precious since the beginning of time.  That’s a start!  

Bullishly, they note:  “As a result of the silver inventory drawdown, by the end of 2002, the worldwide stockpile of refined silver has been reduced to levels sufficient to satisfy less than approximately six months of the existing demand.”

A positive article was written about Apex in Business Week Online: 
A Bright Gleam On Apex — Friday June 4

“Apex has rights in some 100 mineral-exploration holdings at 34 properties in countries such as Bolivia, El Salvador, Mexico, and Peru.”

The article’s analyst notes that in 2-3 years, when/if production comes online, “At silver’s current price of $6 an ounce, Apex could earn $2 to $3 a share, he figures. If silver runs up to $10, earnings could hit $6, he says.”  

I note that this means that at a P/E of 10, if production comes online, Apex may more than tripple in 3 years to $60/share, while silver nearly doubles.   That’s not much leverage, given the increased risks of mining and owning a public company, and given that management of Apex seems to not recognize that silver is money, and debt is aweful.

March 16th, Apex raises $144 million in a convertable debenture deal to help finance the development of San Cristobal.  They now have 350/435, or 80.4% of the capital costs needed for construction.  Raising the last bit should now be very easy to do.  If, while raising money, they held their cash in the form of silver bullion, they would probably not need to raise any more cash at this point, since silver has moved up over 50%.

See my silver stock report #40 for reasons why Apex will not likely use their cash to buy silver bullion while they wait for higher silver prices.

Apex silver primarily has institutional investors. 

Apex has a lot of zinc. That’s an added bonus that is not factored in to my method of valuation. Zinc prices have been heading up soon, so that’s another bonus. Plenty of zinc is especially good if zinc is moving up in price.  Zinc hit a recent high of $.51/lb., from a low of about $.35/lb. For zinc prices, see

Apex is not mining now, but are waiting for higher silver prices.  George Soros, Billionaire, owns a bit of this one, his group of funds owns over 14% I read recently.  There are several other zinc / silver plays on this list that investors might also consider: Canadian Zinc, Expatriate, or Metalline (I own Metalline, but not SIL.)

I do not have an idea on whether or not SIL will out perform silver bullion or not.  It’s hard to say, because of that huge zinc bonus.  

HL (HECLA MINING CO) (208) 769-4100
118 mil shares outstanding (August, 2004)
@ $6.83/share 
$806 million Market Cap (MC)
near zero debt, cash: $123 mil (Feb., 2004)
(est. 2004 production 9 mil oz. silver and 215,000 oz. gold )
La Camorra gold mine, 547,885 oz gold.) (x 10 = 5.5 mil oz silver equiv.
San Sebastian silver mine, (proven & probable reserves) 3.8 mil (down from 8)
Greens Creek silver mine (proven & probable reserves) 31 mil (HL owns 30% of this, but the 31 mil oz. number reflects that percentage ownership.)
the Lucky Friday mine (proven & probable reserves) 10 mil. (down from 14)
5.5 + 3.8 + 31 + 10 = 48.9
Total silver equiv. reserves = 48.9 mil oz.
$806 mil MC / 48.9 mil oz. = $16.48/oz.

Additional comments: Given that CDE made a share offer in week #36 for Wheaton River, I expect that Hecla will try a similar tactic very soon, and offer shares to acquire another silver company.  (still waiting…)

Hecla is the most expensive company on the list in terms of cost per oz. of silver in the ground.   But HL has more oz. than listed in the “proven & probable” category used in this calculation. Vein mining makes reserve calculations difficult, and HL has rarely had more than about a 3-4 year picture of reserves ahead of them in 100 years of production. 

So, the other way to value a company based on the fundamentals is on the price to earnings ratio, or P/E ratio.  Hecla has a net income of $6.2 million for the first quarter of 2004, which silver prices were high, and $8.9 million net income for the first half of 2004.  Annualized, that’s $24.8 million to 18 million.  The higher number gives a P/E ratio of   $806 mil MC / $24.8 mil =  33, which indicates to me that HL is way too expensive of a stock to buy.  Other silver properties and companies in the silver world have expected P/E ratios of as low as 3.  

At the NY Gold show in June, I spoke with Vicki Veltkamp, Hecla’s vice president of investor and public affairs, and I listened to her 15 minute presentation on Hecla at the show.  I felt that her presentation honored my work, since she focused on the fact that Hecla does not have substantial reportable reserves, due to the nature of vein mining.  She also emphasized that they already had detailed plans for spending all of their available cash, of $123 million, which implied that they had nothing left over to buy silver bullion.   Point: HL is not going to buy silver bullion with their cash anytime soon.  

One of Vicki’s arguments was that HL only produces 9 million ounces of silver, and that in a market that produces 500 million ounces of silver a year, that withholding production would not significantly move up the price.  I think she’s looking at the wrong numbers.  HL’s market cap has recently ranged from $600 million to up to $1,000 million.  The remaining silver at the COMEX, available for delivery in the registered category is only about 50 million ounces, not the 500 million ounes annually produced.  The available silver is valued, at $6/oz., at $300 million.  HL could issue 1/4 to 1/3 more stock than they already have outstanding, and use the proceeds to buy perhaps $300 million worth of silver bullion, and likely break the price to sky high levels, which would boost profits enormously.

If HL mines 9 million ounces of silver a year, at a cost of about $5-6/oz. (because their profits are slim), then if the silver price rises to about $33/oz, and other costs remain the same, HL could be making $250 million dollars per year.  It seems the largest silver companies have absolutely no vision about how they can affect the markets, and take a leadership role in the world of silver.  

I urged Vicki that HL should use their stock or cash, if not for buying silver bullion, then to acquire other silver companies, since I believe their stock is overvalued.  Vicki said HL does look at many acquisition opportunites, and would be interested in looking at others.

I expect silver bullion to continue to outperform HL stock at these prices.
The above list marks the end of the companies that I consider to be “very expensive”.  Last time I updated the profiles above was October 2004.  I don’t intend to make any further updates for perhaps the next year, unless their stock prices fall dramatically, perhaps by over 50% to 75% in many cases.  Otherwise, I just don’t see that re-evaluating those expensive companies is worth my time.

FSR.TO FSLVF.PK (FIRST SILVER) (604) 602-9973 or (888) 377-6676
38.6 mil shares fully diluted (March 2004)
@ $2.08/share Cdn x .81 US/Cdn = $1.68 US
$65 mil MC
From the Company’s main page:
“As at December 31, 2001, First Silver’s mineable reserves were 12 million ounces of silver and inferred resources totaled 30 million ounces of silver. The mine is developing a 1000 plus meter exploration drift to upgrade currently identified inferred resources to mineable ore reserves and to discover new reserves.” (12 + 30 = 42 mil oz.)
(The company appears to mine about 2 million ounces of silver per year, so perhaps by mid 2004, that would be 5 million ounces mined out from reserves and resources?) 42 – 5 = 37 mil oz.
First Silver owns 200,000 ounces of refined silver, preferring to hold silver, rather than paper dollars!
12 + 30 = 42 mil oz.
$65 mil MC / 37 mil oz. = $1.76/oz.
You get “approx” 4.08 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments: First Silver Reserve Inc. Purchases Silver
Thursday October 7

“First Silver has purchased 100,000 ounces of silver (equivalent to approximately 5% of annual mine production).”

This is a high grade, producing miner.  The high grades, about 300g/ton, are a plus.   They are also actively exploring, another plus. 

1st Q, 2004, FSR.TO earned $1.45 million Cdn?, or 4 cents/share, ending a string of losses for the 6 quarters prior. 
The Company recorded a profit of $1.93 million or $0.05 per share for first half of 2004, as compared with a loss of $0.28 million or $0.01 per share for same period in 2003.

“Total costs, net of gold credits, were $4.92 per ounce of silver in the three months ending June 30, 2004, as compared to $5.90 per ounce of silver in the year earlier period. Costs in 2003 were increased due to mill equipment breakdowns.”

Produced 565,332 oz. silver for the quarter, and 1288 oz. gold.

First Silver is unhedged, and remain committed to remaining unhedged.

GRS GAM.TO (GAMMON LAKE) (902) 468-0614
93.4 mil shares fully diluted (Jan 2005)
@ $5.42/share 
$506 mil MC
Raised $110 million in Jan 2004 financing!
Total Ocampo “1.85-million gold ounces and 76.7-million silver ounces in the measured and indicated categories and a further 2.55-million gold ounces and 127.8-million silver ounces in the inferred category.”
Inferred: 2.55 mil oz. gold, 127.8 mil oz. silver
Silver equiv = 25.5 mil oz. + 128 mil oz. = 153.5 mil oz.
Measured & Indicated: 1.85 mil oz. gold, 77 mil oz. silver
silver equiv = 18.5 mil oz. + 77 mil oz. = 95.5 mil oz.
Total silver equiv: 249 mil oz.
Ocampo now has proven and probable RESERVES of 56 million oz. of silver, and 2.2 mil oz. gold. Reserves are a higher classification than resources, and come from a bankable feasibility study.
Gammon owns 26.3% of Mexgold, MGR
Since Mexgold owns 185 mil oz. of “target exploration potential”, 26.3% of that is 48.6 mil oz.
249 + 49 = 298 mil oz. (231 oz. in report #49, last week)
$506 mil MC / 298 mil oz.= $1.70/oz.
You get “approx” 4.22 ounces in the ground for 1 oz. silver’s worth of stock.
**Note** most of Mexgold’s oz. that are added in are an “exploration target” not yet “inferred resources”.

Additional comments: Nov 11th, 2004 Gammon Lake resources Inc. annouces completion of bankable feasibility study for phase one of the Ocampo Gold-Silver Project.
“Independent Study Demonstrates Extremely Robust Economic Potential with Annual Production of 170,000 oz. of Gold and 6.2 Million oz. of Silver and an IRR of 65%.”  Project life: 6-7 years, calculated with an est. market gold price of $400 and silver price of $6.50

“Overall, a total of 130,000-metres have been drilled in more than 800 holes since the inception of the Gammon Lake Ocampo Project”

At prices of a 64:1 silver:gold ratio at $425/oz gold and $6.60/oz silver, the resources are worth $1048 million of silver, and $1411 million worth of gold.  Cash cost is $85/oz.  Life of mine is 7 years.  

WTZ WTC.TO (WESTERN SILVER)  (formerly Western Copper) Jay Oness Toll Free: 1-888-456-1112
50.45 mil shares fulmy diluted (Dec 2004)
@ $10.29/share
$519 mil MC
(not actively mining, no debt)
$64 million Cdn cash raised in Dec. 2004 financing, in addition to $14 mil Cdn previously.
The capital cost to get the mine going is estimated to be US $148 million
Western Silver Completes Pre-Feasibility Study on Chile Colorado Zone at Penasquito
October, 2004: The total measured and indicated sulfide resource at Peñasquito, including the March 31, 2004 resource estimate at the nearby Chile Colorado deposit, now stands at 272.96 million tonnes, containing 273.86 million ounces of silver, 3.61 million ounces of gold, 1,779 million pounds of lead and 4,503 million pounds of zinc.
274 mil oz. silver + 36 mil oz. silver equiv (gold) = 310 mil oz.
+ 29 mil oz. of inferred silver oxide resource.
Brechia zone will likely double the numbers: probably in Jan will have 500 mil oz. silver, 5 mil oz gold.
Plus, they have two other zones that could each duplicate the success of each of the other two. So up to a Billion… oz. of silver as “exploration potential”!
Feasibility: 2006-7 production timeline.
$519 mil MC / 339 oz. = $1.53/oz.
$519 mil MC / 1000 oz. = $.52/oz. –exploration potential 
You get “approx” 4.68 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration Potential = 13.8

Additional comments: Western Silver has a large zinc bonus, a copper bonus, and a gold bonus!

WTZ’s silver page: “Why Silver?”  While acknowleding the silver fundamentals as produced by the Silver Institue, and shrinking supplies, it says nothing about silver as money.  WTZ acknowledges their role is to make sure their shareholders are “well positioned to take advantage of any shortage of supply or rise in the price of silver.”

Western Silver was formerly Western Copper… Copper now at $1.35/lb!

Note the capital cost to get the mining started: $148 million dollars.   
WTZ also has the following other metal resources:
4.5 billion pounds of zinc x $.58/lb = $2.61 billion
673 million pounds of copper x $1.30/lb = $874 million
1.3 billion pounds of lead x .40/lb = $520 million

39.1 mil shares fully diluted 1 Q 2004
@ $6.86/share
$268 mil MC
Cash on hand, Fully Diluted: C$34 million
At 70:1 ratio, 3.5 x 70 = 245 “silver equiv” of gold, and 160 mil of silver = 405 mil oz. silver equiv. total.
245/405 = 61% of the mineral value is in the gold, 39% silver.
At 10:1 ratio, 35/195 = 18% of the mineral value is in the gold, 82% silver.
“In addition to the resources already drilled, Minefinders controls a strong portfolio of properties in Nevada, Arizona, and Mexico which have the potential to host new multi-million ounce discoveries over the next few years.”
The Dolores project is an advanced stage gold-silver resource, containing a measured and indicated resource of 97.3 million tonnes at an average gold-equivalent grade of 1.54 grams per tonne: 2.75 million ounces of gold and 128 million ounces of silver. Additional inferred resources of 650,000 ounces of gold and 28 million ounces of silver have also been delineated.
$268 mil MC / 195 mil oz. = $1.37/oz.
You get “approx” 5.21 ounces in the ground for 1 oz. silver.

Additional Comments:  
At 70:1 silver to gold ratio, over half of MFN is in gold, so consider this a significant gold bonus. 

* TM.V TUMIF.OB (TUMI RESOURCES) (TUY Frankfurt Exchange)  (I own shares) Nick Nicolaas IR (604) 657 4058
24 mil shares fully diluted (Mar. 1, 2004)
@ $.61/share Cdn x .81 US/Cdn = $.49 US
$12 mil MC
43-101 compliant update: Cinco Minas: 14.3 mil oz. silver, 100,000 oz. gold indicated and inferred, 
Tumi owns 60% interest in Cinco Minas .6 x 15 = 9 mil oz.
But there is further exploration potential at Cinco Minas.  The 43-101 report only considers 120 meters of 790 meters, and it’s open at depth.
Debt free, 2 projects in Mexico.
Raised $2.7 million Nov. 14, 2003
$12 mil MC / 9 mil oz. = $1.32/oz.  ***I’m using this number***
$12 mil MC / 50 mil oz. = $.24/oz.  (exploration potential)
You get “approx” 5.44 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration Potential: 30 (likely plus more after bonanza silver discovery late November, 2003.)

Additional comments: 

Tumi Resources Limited – Updated Gold/Silver Resource Estimate at the Historic El Abra Mine Area, Cinco Minas, Mexico, Achieves Major Milestone

Tumi soared in late November, 2003, after the company announced a bonanza grade silver discovery after drilling.  

Tumi is focused on becoming a “premiere junior silver explorer.”  It’s good to see the focus is in the right metal.  Doing active drilling to prove up their projects and increase resources.  Nick Nicolaas really understands the silver story, beliving silver has much greater appreciation potential than gold. 

I own shares of TM.V.

PAAS (PAN AMERICAN SILVER) (604) 684 -1175
70 mil shares fully diluted (April, 2004)
@ $15.87/share
$1111 mil MC
10 silver properties (3 in production)
produced 7 mil oz. silver in 2001: estimated to produce 15 million ounces in 2005
Reserves & Resources through Dec. 11th, 2003 from
743.2 million total
850 million ounces, says Ross Beaty, CEO, on Sept 17th, 2004
$1111 mil MC / 850 mil oz. = $1.31/oz.
You get “approx” 5.49 ounces in the ground for 1 oz. silver’s worth of stock.

Additional Comments:  See my silver stock reports #51 & 52 for more on whether PAAS will buy silver bullion.  I don’t think they will any time soon, unless more shareholders demand it.

Pan American of Canada buys Morococha silver mine in Peru for US$35 million  This $35 million acquisition is a great deal for PAAS, and a minor help for PAAS shareholders.  According to the press release above, the silver mine produced 3.5 million ounces of silver a year, at a cash cost of $3/oz., which is great!  At $6.50/oz, that’s $3.5 x 3.5 mil oz. = $12.25 million per year profit after cash costs!  That gives the acquisition a P/E ratio for the mine’s acquisiton cost of under 3!  What a deal!  

Unfortunately, PAAS shareholders are paying way above that when they buy the stock today.  After this acquisition, PAAS should have a “2004 silver production forecast to 13 million ounces from 10.1 million ounces and will reduce forecast cash costs to below $ 3.50/oz, bringing anticipated total costs to less than $4/oz for the year.”  Now, at $6.50/oz, that’s $2.5 x 13 mil oz. = $32.5 million per year profit, after cash costs, excluding management expenses?  That gives a P/E ratio for PAAS of about $1000 / $32 = 31.  Therefore, considering the two P/E ratios, 31 compared to under 3, PAAS stock is over ten times overvalued compared to other silver mining opportunities that exist in the market, such as the property they just purchased.

PAAS had a very meager profit of $1.3 million, second quarter, 2004.  I certainly would not get excited about paying nearly a billion dollars in market cap to get an annual earnings of $5 million.  That’s a P/E ratio of 200!  

The reason silver investors are investing in companies such as PAAS is for the upside potential of rising silver prices, and the leverage that silver stocks offer.  

PAAS plans to produce 15 million ounces of silver in 2005.  Therefore, for every dollar the silver price rises, (while other costs remain flat), PAAS expects to earn an extra $15 million, perhaps a small number for the large market cap.

Doing the math on that, PAAS would need about an extra $100 million in annual profits to get to a “reasonable” P/E ratio of 10.  This would require an additional rise in the price of silver by 100/15 or an extra $6.66 per ounce to rise to about $13.33.  And by then, I would expect the price of PAAS to be fairly valued at a market cap of about $1000 million, with a P/E of ten.  In the meantime, however, you could invest in silver bullion, and double your money.   Therefore, I think silver bullion may outperform PAAS shares.  On the other hand, if stock buyers bid PAAS up so that it has a P/E of about 20 by the time silver is $13.33/oz., (if that happens by next year, and is actually a reasonable expectation for a major) then PAAS and silver bullion may perform about the same.

Given that I expect silver and PAAS to perform about the same from these prices, and given that stocks are more risky, I would not buy PAAS even if they were to buy silver bullion with spare cash.  Yet, I advocate that PAAS buy silver bullion.  Why?  Because it would help their shareholders.  To be abundantly clear, I support buying silver properties as being a better investment than silver bullion at this point.  However, either silver bullion, or silver properties, are better than paper money, which PAAS has been holding for over a year now.

28.9 mil shares fully diluted (Nov., 2004) 
@ $.93/share Cdn x .81 US/Cdn = $.75 US
$22 mil MC
Have $5 million cash in the bank as of Dec. 2003. 
holds the right to acquire a 100% interest in six mineral properties in Mexico.
Oremex will focus on the exploration and development of the Tejamen Silver Property and the San Lucas Silver Property.
They are hoping to explore for up to 100 mil oz. silver by drilling over the next year.
–Experienced team of geologists and mannagement that have put other properties into production:
Anthony R. Harvey, Chariman, has put 14 properties into production in his 40 year career.
for an inferred resource of 8.4 million metric tons at a grade of 89 g/t Silver (2.86 opt) and 0.2g/t Gold (0.006 opt).
2.86 x 8.4 = 24 mil oz. silver at Tejamen (one of six silver properties)
$22 mil MC / 24 mil oz. = $.91/oz.
$22 mil MC / 100 mil oz. = $.22/oz. –exploration potential
You get “approx” 7.90 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration Potential: 33

Additional comments:  Oremex intersects 20 oz. of silver per tonne over 292 feet  Wednesday September 8

Tejamen property in Mexico: Oremex reports exceptional high grade intercepts

36 ounces per tonne over 92 feet including 76 ounces per tonne over 39 feet.
A mineral resource study is underway and expected to be announced by the beginning of March 2005

FAN.TO FRLLF.PK (FARALLON RESOURCES (604) 684-6365  Erick Bertsch 
135.3 mil shares fully diluted (Feb, 2005)
@ $.81/share Cdn x .81 US/Cdn = $.66 US
$89 mil MC
Exploration and development in Mexico.
Managed by Hunter-Dickinson
On 4 sulphide deposits out of 16, 29 mil tonnes of ore grading 89 grams silver/t and 1.57 g gold/t.
Conversion: 89 grams x .03215 troy oz./gram = 2.86 oz./t silver
RE: those 29 mil tons, they “anticipate increasing resources to 50 mil tonne range…”
2.86 oz./t silver x 29 mil tons = 83 mil oz. silver
1.5 mil oz. gold x 10 = 15 mil oz “silver equiv”.
Total: 98 mil oz. silver equiv. 
(Exploration potential = x 1.7 = 167)
(Minus:  The recoveries on low grade ores such as this are typically not 100%, but may be more like 50-85%, but it also depends on which metal in the polymetalic deposit that they most focus on extracting, and also depends on advances in technology.)
$89 mil MC / 98 mil oz. silver equiv. = $.90/oz.
$89 mil MC / 167 mil oz. silver equiv. = $.53/oz. –exploration potential
You get “approx” 8.0 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration potential = 13

Additional comments:  Farallon Completes Cdn $20 Million Financing Wednesday January 5
28,571,877 units at $.70 with warrants at $.80, hold time ends on April 18, 2005.

These drill results contain much higher levels of zinc than previous drilling, 4-8% compared to 2%.

The last drilling was done in 1999… because of low zinc prices: 46% of the price of the metals was in the zinc before prices crashed…  The largest componant in late 2003 was gold, which was surprising to Eric, the IR guy I spoke with.  About 1/3 is in silver now.

At today’s low metals prices:  
2% x 2000 lb = 40 lbs zinc x $.42/lb =  $16.8 for the zinc  (.37 to .50 lb zinc.)
3.14 oz. x $5.15 = $16 for the silver.
.055421 oz. x $385/oz. = $21 for the gold
(Assuming 100% metals recovery–which is not likely to be the case.  It may range from 60% to a higher percentage, depending on extraction methods used and the particular mineral targeted, which constantly change with technology advancements, and price changes in the metals.  By the time a mine like this gets running, perhaps in 5 years or so, things may change to allow even greater metal recovery.)

The stock once had a market cap of $450 million, Canadian.  

Speaking with FAN.TO guys, they think reserves of ore could be 50 mil tonnes OR MORE, but that they really don’t know, and want to issue conservative estimates.

* CFTN.PK (CLIFTON MINING)  (I own shares) 801-756-1414   (303) 642-0659 Ken Friedman
47 mil shares fully diluted  (May 2004)
@ $.74/share US
$47 mil MC   –source of 100 mil oz. resources est.
“A previous geologist has talked about a possible resource of 1 billion oz. of silver, and 5 million oz. of gold.”
100 mil oz. silver
+500,000 oz. gold x 10 = 5 mil oz. silver equiv.
= 105 mil oz. silver.
up to 1000 mil oz. silver “exploration potential”.
Clifton has a complex JV agreement with Dumont Nickel. (DNI.V DMNKF.PK)   – exploring Clifton Mining’s property In sum, here is what Keith Moeller VP, Clifton Mining Company wrote to me:  “If Dumont produces a positive feasibility study on an individual property piece, then they gain a 50% interest in that piece alone, not in the rest of the property.  If they spend more than 5 million dollars (US) on any one piece and they produce a positive feasibility study on that piece, then they will gain a 60% interest in that one piece of property, not in the rest. If they stop at any time or fail to produce a positive feasibility, then they will gain no interest in any of our property.  Right now we have around 7 different pieces of the property that have “Stand Alone” mine potential.  If Dumont stakes or purchases any property within five miles of the joint venture property, then we automatically receive a 50% interest in that property.”
My problem is how to quantify that.  First, there is the range of potential silver resources.  Second, there is the range of potential ownership, which is highly variable, and not subject to the entire property, nor necessarily subject to spending by Dumont, but subject mostly to Dumont doing a positive feasibility study on each of many properties .  At the extreme ranges, the values are:
40% to 100% of 105 = 42 – 105 million oz.
40% to 100% of 1000 = 400 – 1000 mil oz. “exploration potential”
$35 mil MC / 42 mil oz. = $.83/oz.
$35 mil MC / 1000 mil oz. = $.035/oz.
You get “approx” 8.60 ounces in the ground for 1 oz. silver.
Exploration Potential: 205

Additional comments: is hosting a “Meet the CEO” session with Dr. Friedman of Clifton. If readers would like to send him some questions (open until Aug. 23), see:

Note the “exploration potential” is very large, but it also assumes that their JV partner, Dumont, does not acquire any interest in the property at all. 

Perhaps an interesting and novel way to determine percentage ownership of the projects would be to look at the relative market caps for both Clifton, and Dumont, and then assume that the market has it “about right”, and then use thier relative values to determine a possible percentage ownership of each.  And then, simply decide to own both, keeping your percentage ownership of each company, about the same.  For example, if the MC of Clifton is $43 mil, and Dumont is about $10 mil, so own about 4.3 times as much Clifton as Dumont.

JV agreements were primarily entered into during a time when it was difficult to raise money through share offerings, as a way to advance the projects.  Unfortunately, JV agreements also make it difficult for investors to value a company!  Several companies at the NY Gold show in June were just completing buyout agreements (or working on doing so) with their JV partners.  

For more info on what’s going on with Clifton, see , JV partner.  One man suggested buying both Clifton and Dumont to ease the difficulty in trying to figure out their JV agreement.

Clifton has 28% ownership of a biotech firm that makes a colloidal silver.  The biotech firm has a patent on a “super” colloidal silver solution made with 10,000 volts that adds oxygen that gives it more powerful antibacterial properties, and is safer since it uses less silver, which would prevent “blue skin” argyria.  Normal colloidal silver that you can make at home with 30 volts works to kill bacteria by disrupting the oxygen metabolism of the cell wall, killing bacteria with oxygen.  The market for safe antibiotics is in the multi Billions of dollars. 

If you are a Shareholder of Clifton Mining, you can call the company directly, and order the colloidal silver from the company at a substantial discount to the offer below.  Shareholders can buy the ASAP solution for $8/bottle, but you have to order a minimum of a full case of 50 bottles at a time, for $400. 

You can now order the colloidal silver solution online, by the bottle, at
To receive 10% off, use 50105 as the coupon number.
Clifton Mining Company – ASAP Product to Be Produced in Brazil
The minimum royalty payable to ABL will be $57,000 per month.  28% for Clifton is $191,520/year.

(I own shares of CFTN.PK)

IAU.TO ITDXF.PK (INTREPID MINRLS) Stephen Coates, Investor Relations (416) 368-4525
52.2 mil shares fully diluted (October, 2004)
@ $.53/share Cdn x .81 US/Cdn = $.43 US 
$22 mil MC
$3.2 million cash from Dec. 9 financing.
Company’s exposure is about half to gold, half to silver in several projects.
Joint Venture with BHP Billiton focused on “Cannington” style silver deposits using proprietary BHP Billiton data.
(all figures are “exploration potential”)
El Salvador – 15 mil oz.
Argentina – 9 mil oz.
605,000 oz gold (240k in El Salvador, 365k in Argentina)
Total: 30 mil oz. silver
Total: 30 mil oz. “silver equiv”. (exploration potential or indicated or inferred, not reserves)
$22 mil MC / 30 mil oz. = $.73/oz.
You may get “approx” 9.8 oz. of silver of 1  oz. of silver’s worth of stock.

Additional comments:  Intrepid Partners Advance Projects and Discover More Gold and Silver
–Aug 18th. (Intrepid and Silvercrest in El Salvador)

More drill results released on March 3, 2004:
Intrepid Intersects 10.3m (34ft) of 70.9 g/t (2 oz/t) Gold and 988 g/t (29 oz/t) Silver at Kamila, Argentina

The stock price exploded, nearly doubling, in response to the news of the above drilling results.

Since this company is about half gold and half silver, the 10:1 ratio really cuts down the “silver equiv” numbers, so keep in mind the “gold bonus” factor here.  But it’s like that with a lot of the companies on this list, so keep that in mind, and do your own math if you want to use the 70:1 ratio.

SSRI SSO.V (SILVER STANDARD RESOURCES) (604) 689-3856 or (888) 338-0046
51.8 mil shares fullly diluted (August 2004) –from the company web site.  
@ $13.68/share
$709 mil MC
debt free, cash: $Cdn 36 mil plus 2 million ounces of silver, plus securities.
As of May 12: The company has budgeted $8.2 million in 2004 for feasibility and scoping studies and exploration of its 15 projects.  With cash of $61 million, and marketable securities of approximately $10 million at March 31, the company decided to invest approximately 20% of its cash and securities in physical silver following the decline in silver prices in April and May.  Silver Standard now owns over 1.95 million ounces of silver.  This silver is held on an allocated and segregated basis and, consequently, is not available to be loaned.
not mining or producing; 23 silver properties
Resource summary of 15 properties:
Silver: Indicated: 508 mil oz. + Inferred 446 mil oz. 954 mil oz.
Gold: 2.2 mil oz. = 22 mil oz. silver equiv at 10:1 ratio
2.2 mil oz. gold. Silver equiv = 22 mil oz. silver. (22 + 869  = 891 mil oz.) 
$709 mil MC / 976 mil oz. = $.73/oz.
You get “approx” 9.88 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments:   
Congradulations to SSRI for converting some of their cash, 20%, to silver bullion!  I wish it was more, but it is certainly a great start!   SSRI decided to hold such a large percentage of their cash in the form of bullion, first, of all silver miners!  

SSRI now has more silver resources than PAAS.  I’d expect SSRI’s market cap to soon exceed PAAS, especially given PAAS management’s lack of understanding that silver is money, and can be used as money.  

SSRI really is the “silver standard”.  SSRI has the largest market cap this far down the list, which makes it a more attractive target for people with larger amounts of money to invest.  SSRI continues to add resources through drilling and acquisition.  This company seems to really understand the silver story, and helped to educate me as an investor.  

I attended a two hour SSRI presentation after the Gold show in SF in late November, 2003.  For the most part, their properties are very well drilled, and they have a fairly solid idea on how much silver oz. in the ground they have.  They started their plan to acquire silver properties and become a “silver company” in about 1993, which explains why they have such a large market cap, and so many good properties with so many ounces of silver.  

Some investors like SSRI because of the diversification –SSRI owns many silver properties.  You can get a similar kind of diversification by owning stock in many silver companies.

* PLE.V (PLEXMAR RESOURCES INC) (I own shares)  (now updated)  Guy Bedard, President, Phone: (418) 658-6776 Fax: (418) 658-8605
–Signed two option agreements to acquire two exploration projects in Northern Peru, Cascajal and Marilia.
67 mil shares fully diluted (August 2004) –Guy gave me this number (Sept, 2004)
@ $.125/share Cdn x .81 US/Cdn = $.10 US
$7 mil MC
$1.4 mil Cdn. money in the bank.
–just acquired (OPTIONS ON) 2 silver mines in Peru. Total: 1.09 mil gold oz., 28.4 mil oz. silver
Total silver equiv: 38.4 mil oz. –I can’t find these numbers on the new website?!  And I didn’t realize the property acquisitions were options, and not 100% owned acquisitions?!
Cascajal–Plexmar must pay to the owner $ 1 M US over a 5 year period with a $ 500,000 US payment in the 5th year.
Cascajal–1,700,000 tonnes representing a total of 260,485 ounces of gold and 13,446,000 ounces of silver. (not 43-101) 
$7 mil MC (+ $5 mil in needed financings?) / 16 mil oz. = $.74/oz.
$7 mil MC (+ $5 mil in needed financings?) / 38.4(old number from web site) mil oz. = $.31/oz.
You get options on “approx” 9.73 ounces in the ground for 1 oz. silver’s worth of stock.
You get options on “approx” 23 ounces in the ground for 1 oz. silver’s worth of stock.

I own shares of PLE.V

49,059,825 mil shares fully diluted (May 27, 2004)
@ $3.81/share Cdn x .81 US/Cdn = $2.87  U.S
$187 mil MC
Exploring in Argentina.
$4.5 million cash
Thu Jan 6, 2005
More High Grade Silver at Loma de la Plata and Sector Zeta on IMA’s Navidad Silver-Lead Project

IMA Exploration Inc. (IMR – TSX.V, IMXPF – OTC.BB) is pleased to announce the complete results of surface rock sampling at the Loma de la Plata and Sector Zeta targets on it’s 100% owned Navidad project in Patagonia, Argentina. Loma de la Plata and Sector Zeta are located approximately 4 km to 5 km to the west of Galena Hill Deposit. Both zones show excellent potential to add to the 268 million ounce indicated silver resource (80.8 Mt @ 103 g/t silver) that has been defined to date at Galena, Connector, and Navidad Hills (see attached map).
My comments:  This resource might be perhaps 1/4 or 1/5th of the overall potential resources, based on estimating by looking at size of the land area being explored, compared to the size of the land area covered by the resource calculation.  The full exploration potential might be perhaps 1000 mil oz.
$187 mil MC / 268 mil oz. = $.70/oz 
$187 mil MC / 1000 mil oz. = $.19/oz 
You get “approx” 10.3 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration potential may be 38 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments: IMA has so many positive results, it’s hard to keep track!

IMA has several joint venture partners in the area in Argentina near Navidad.  See Tinka, Cloudbreak, Consolidated Pacific Bay.  Other companies are in the near area such as Pategonia Gold, Pacific Rim, and Silver Standard.  

IMA had many other silver properties that they just spun off into a new company, Golden Arrow. For every 10 shares of IMA existing shareholders got 1 share of Golden Arrow. (See below)

(I own shares of IMR.V)

78.25 mil shares fully diluted (Dec, 2004)
@ $.64/share Cdn x .81 US/Cdn = $.52 US
$41 mil MC
$13 million cash, Cdn, no debt.
not mining ($20 mil needed to finish & start the mine) ($100 mil worth of mining infrastructure in place!)
~70 mil oz. (IN ZONE 3 only!! of 12 zones! Their 18 year mine plan consists of zone 3 only, but there are 12 mineralized zones on the property.)  
$41 mil MC / 70 mil oz. = $.58/oz.  
You get “approx” 12.4 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments:  November 22 Proposed financing: Canadian Zinc Corporation: $9,800,000 Private Placement Financing
At $.65/unit, with one unit containing 1/2 warrant at .85, with flow thru shares at $.85.  Adding 20.75 mil shares, fully diluted–but the financing was postponed.

CZN has good profit potential.  

To get the mine up and running, they might be able to pay back debt financing within 2 years, but I would hope they would avoid debt, and raise the capital in additional financings.

I note several very, very positive things about this company. 

1. This was the mining operation set up by the Hunt brothers, the major silver investors in the silver spike to $50/oz. in 1980 who were bankrupted by their own debts and margin calls as a result of the COMEX rule changes and silver short sale manipulation. The Hunts spent $50 million building infrastructure to build the mine. They were 90% complete when bankruptcy hit. The value of those buildings is now perhaps over $100 million, and the mine only needs about $20 million (CAN) ($15 mil US) to get the mine up and running. That’s much cheaper than other cost estimates of other operations.
2. High Grade ores:  
12% zinc/ton; = 240 lbs. zinc/ton x 50 cents/lb. = $120/ton for the zinc.
10.1% lead/ton = 202 lbs. lead/ton x 40 cents/lb. = $80/ton for the lead.
6 oz. silver/ton x $6.95/oz. = $42/ton for the silver.
0.4% copper/ton = 8 lbs. copper/ton x 1.30 cents/lb. = $10/ton for the copper.
Total: $249/ton!   Prices accurate as of Mid Feb., 2004
3.  My method of valuation:  I’m really counting only the silver, not the base metals in my “oz in the ground” valuation.  So consider a significant “zinc bonus”, and “lead bonus”.
4.  Zinc and base metals prices headed up?  About 49 cents/lb. for zinc!  Check for updates.  

Carol Stephan, director, 208-666-4070
18 million outstanding shares
@ $.40 US
$7.2 mil MC
Lakeview Mine and Mill: 24,190 tons of mineralized material delineated at Lakeview, grading an average of 11.8 oz/t silver.
= 285,000 oz. silver.  But is a narrow (high grade) vein mine, like Cour d’Alene and Hecla, with few reserves.
Conjecture (in Lakeview district): 336,000 tons at a grade of 11 ounces per ton of silver = 3.7 mil oz. silver.  “Terms of the 25-year lease [of the conjecture] include payment of a $3000 per year advance royalty, issuance of one million shares of Shoshone common stock to Chester, and a sliding scale net smelter return based on the spot price of silver.”  At .$60/share, that’s $.6 mil MC more for the lease.
Blende project in Yukon, Canada: 21.4 million tons grading 1.63 ounces per ton (oz/t) silver. (low grade) 35 mil oz. silver; + 1.3 billion pounds zinc, 1.2 billion pounds lead.
Now, 43-101 compliant!  Resource Estimate Completed on Shoshone Silver/ Eagle Plains’ ”Blende” Silver-Lead-Zinc Project
Wednesday October 6
Shoshone must issue 1 million shares, and spend $5 million on exploration by December 31, 2008 to complete its 60 percent earn-in on the blende project.  How to count that?  As an investor, I hate evaluating these kinds of complex deals.  60% of 35 mil oz. silver is 20.9 mil oz. that will cost an additional $5 million, plus a million shares.  At $.60/share, that’s $5.6 million for 20.9 mil oz. resource.  That’s  $7.2 mil MC / 20.9 mil oz. = $.34/oz.  acquisition cost to Shoshone for blende, which they don’t own yet, just an option.  I don’t like options, which is why I buy silver bullion, and mining companies in the first place, as they are “unexpiring call options” if they own their properties.  
Total: 4 mil oz. silver, plus an option on 20.9 mil oz. silver at blende.
$7.2 mil MC (plus $6.2 mil they need to raise to maintain leases) / 4 mil oz, plus 20.9 mil oz. (24.9 mil oz.) = $.54/oz.
You get options and leases that, if they raise money at the current share price, may give “approx” 13.4 ounces in the ground for 1 oz. silver’s worth of stock.

28.4 mil shares fully diluted (Jan, 2005)
@ $2.29/share Cdn x .81 US/Cdn = $1.85
$53 mil MC
“First Majestic owns the La Parrilla Silver Mine located outside the city of Durango, Mexico. Silver production began in July. Production is running at 180 tonnes per day. Mine development and mill improvements are underway to advance production to 500 tonnes per day. First year production of over 1 million ounces of Silver is anticipated.”
First Majestic acquired the La Parrilla Silver Mine in Mexico, a former producing silver mine that closed in 1999 due to low silver prices.  Now re-opened, they expect to produce 175,000 tonnes a year at 300g/t silver, which means 1.8 mil oz. of silver produced per year.  The cost to mine is estimated at $25-30/tonne, and recovery is 85-90%.  Cash costs are expected to be $3/oz.  Producing 1.8 mil oz. of silver per year. 10 yr. mine life.
–First Majestic recently purchased the Dios Padre Silver Mine which conservatively contains approximately 57 million ounces of 456 gpt silver and appears amenable to open-pit mining. Preliminary work began in January to define the parameters required to bring the Dios Padre back in production as soon as possible.
–The Candamena Mining District was also recently acquired. This 5,215 hectare property hosts several highly mineralized areas. 1997 work including 60 drill holes of over 11,500 meters provided an estimated resource of 1 million ounces gold and 20 million ounces of silver amenable to open pit mining.
Two new acquisions:
1.  Dios padre Silver Mine: historic, 2002, a US company proved up 60 mil oz. silver. 
465 g/t–not 43101 compliant.  Other historic, from 50 yrs ago, up to 200 mil oz.?
2.  Candamina mining district.  1 mil oz. gold 20 mil oz. silver…
La Parrilla, 20 mil oz. + Dios Padre, 60 mil oz. + Candamena, 20 mil oz.
Exploration Potential: 100 mil oz. silver to 200 mil oz. silver.
$53 mil MC / 100 mil oz. = $.53/oz. 
$53 mil MC / 200 mil oz. = $.26/oz. 
You get “approx” 13.5 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration potential may be 26 ounces in the ground for 1 oz. silver’s worth of stock.

In 2 years, by Dec 2006, goal is to produce 10 mil oz. silver/year.

54.3 mil shares issued (March, 2004) –Still listed at website on Feb, 2005, as if current, but it is not.
+ 6.1 mil warrants (March, 2004)
+ 24.7 mil shares in the July 2004 financings
= 85.1 mil shares fully diluted Aug. 2004
@ $.22/share Cdn x .81 US/Cdn = $.18
$15 mil MC
TULSEQUAH: 9 mil tonnes indicated and inferred at 107.5 g/t x .03215
= 31 mil ounces silver (3.4 oz/ton low grade silver, with other minerals)
(also have significant gold ($30/ton at $400/oz.) and zinc $60/ton at $.46/lb.)
728,000 oz of Gold x 10 = 7.3 mil “silver equiv”
= 38.3 mil oz. silver equiv.
$15 mil MC / 38.3 mil oz = $.40/oz.
You get “approx” 18.1 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments: PP: July 19th 2004: 6.9 mil units at $.35/unit + warrant at $.50, plus 7.5 mil flow thru shares at $.40.
PP July 23, 2004: 1.7 mil units at $.35/unit plus full warrant at $.50.

RDV has a “gold bonus”.  At $409/ gold, and $6.50/oz. silver,  it’s about $300 million worth of gold, and $200 million worth of silver, or about 60% of the value is in the gold.  Since my method really undercounts the gold, this means there is a significant “gold bonus” here.

* SVL.V  STVZF.PK (SILVERCREST MINES) (I own shares) (604) 691-1730 
31 (est.) mil shares fully diluted (Feb., 2005)
Principals’ Shareholdings are 27% of issued
@ $.80/share Cdn x .81 US/Cdn = $.65 US
$20 mil MC
$3 mil cash in the till.
El Salvador – El Zapote Project: Indicated and Inferred silver:  14.3 mil oz. silver
Guatemala – Concepcion Concession (pending):  includes several past producing silver mines.  documented results of greater than 13,714 g/t silver  — a historical resource of 1.9 million tonnes grading 86 g/t (2.5 opt) silver (4.75 mil oz., non- 43-101 compliant)
Mexico – Silver Angel Project– a 100% interest in 10,300 hectares located in the northern Sierra Madre Range… with structural features that host seven past producing, high grade silver-gold mines. –currently exploring this project.
Totals:  12.8 + 19.8 + 14.3 + 4.75 = 51.65 mil oz.
+85 million pounds of zinc, indicated and inferred. 
$20 mil MC / 52 mil oz. silver = $.39/oz. 
You get “approx” 18.6 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments: PP: 3,100,000 units on Dec 8th, 2004 @ $.90 with 1/2 warrant @ $1.20
SilverCrest Announces El Zapote Drill Results
Wednesday October 13
including 10.5 oz/ton over 249 ft.

The two projects of current focus are in Mexico and El Salvador, (nothing in Honduras at the moment).  The El Salvador project is moving “full speed ahead” with a feasibility study expected by November.  Depending on the study, hoping for produciton perhaps by Jan or July, 2006.  

I own shares of SVL.V 

YZC.V  (Yukon Zinc) (formerly Expatriate Res) (I own shares) 1-877-682-5474 Dr. Harlan D. Meade, President and CEO
199.2 mil shares fully diluted (Jan 7. 2005) (listed on the front page of the web site!)
@ $.245/share Cdn x .81 US/Cdn = $.20
$39 mil MC
$1.2 mil CAN capital in the tilll no debt.
Mostly a base metals company:  Zinc.  Also has some silver & gold.
6 properties.  Most of the value is concentrated in the 100% owned Wolverine Project.
Total mineralization across 6 properties:  97.2 mil oz. silver, 565,000 oz. gold, = 103 mil oz. “silver equiv.”
About 3.8 billion pounds zinc, also some copper and lead.
$39 mil MC / 103 mil oz. silver = $.38
You get “approx” 18.7 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments:  
On Sept 8th, I wrote an article on Expatriate.

Huge, huge zinc bonus, about 3 times the silver value.  Smelter credits are estimated at about 60% zinc, 25% silver, 10% gold and copper, and the rest, other minerals, but that assumes old low prices for silver, about $5-6?/oz.  My method of valuation puts a value on the silver only, not the rest, so this is a significantly better value than my number shows.

Call Dr. Harlan D. Meade, President and CEO 1-877-682-5474, and ask him to send you an information packet on YZC.V.  It contains a good report on why he is bullish on both silver and zinc.

(I own shares of YZC.V)

GGC.V GGCRF.PK (GENCO RESOURCES) IR: Rob Blankstein: 604-682-2205, or
22.4 mil shares fully diluted (Feb 2005)
@ $.78/share Cdn x .81 US/Cdn = $.63
$14 mil MC
–Producer in Mexico.
Inferred resources: 484g/t silver x .03215 = (15.5 oz/t) x 2.3 mil t = 35.8 mil oz. silver
2.00g/t gold x .03215 = 148,000 oz. gold x 10 = 1.5 mil oz. “silver equiv”
385 x .03215 = … x 95k = 1.2 mil oz silver
40+ mil oz. silver equiv. resources
2002 production, 500,000 oz. silver, 9000 oz. gold
$14 mil MC / 40 mil oz. silver = $.35/oz.
You get “approx” 20.3 ounces in the ground for 1 oz. silver’s worth of stock.

Additional Comments:  
PP:  Nov 17th: 250,000 units at $.80 with a full warrant at $.90 Cdn. + 200,000 options.

PP: Oct 5th: 847,000 units at $.80 with a full warrant at $.90 Cdn. Free trading Feb 5th?

As of April, 2004, Genco is producing 35,000 oz/month of silver, earning $100,000 Cdn/month, and expects to earn $1,000,000 Cdn/month by year’s end by doubling both the tonnage and the grade.  Genco is also aggressivly planning on making property acquisitions.

54.3 mil shares fully diluted April 30, 2004
@ $.245/share Cdn x .81 US/Cdn = $.20 US
$11 mil MC
Cello Ccasa (1 project of 4) Resource Estimate – August 2002
31.4 mil oz. silver, 134,000 oz. gold. (x 10 = 1.3) 32.7 mil oz.
(Stilll much exploration work to do.)
The Marcona Copper project is a large potential “copper bonus”.
$11 mil MC / 32.7 mil oz. = $.33/oz.
You get “approx” 21.8 ounces in the ground for 1 oz. silver’s worth of stock.

* SRLM.PK (STERLING MINING) (I own shares) Ray DeMotte 208 666 4070
12.2 mil shares outstanding (May 31, 2004)
16.6 mil shares fully diluted (May 2004) –(To get the latest number, I have to call Ray DeMotte.  Note the date.) 
@ $4.45/share 
$74 mil MC
~185 mil oz. reserves + resource, Sunshine alone
Quote from:
“The prior operator last estimated the mine reserves at 26.75 million ounces of silver, 10.36 million pounds of copper and 7.05 million pounds of lead (or approximately 28.85 million ounces of silver-equivalent), as well as an additional resource of 159.66 million ounces of silver. “
Other properties:
Baroness   15 mil — tailing project, no further exploration potential, (construction finished, testing beginning)
Tesorito      17 mil — + exploration potential
San Acacio    14 mil  — + exploration potential
Total:  231 mil oz. silver
$74 mil MC / 231 mil oz. = $.32/oz. 
$74 mil MC / 550 mil oz. = $.13/oz.  (exploration potential)
You get “approx” 22.4 ounces in the ground for 1 oz. silver’s worth of stock.
(Exploration potential is 53.)

Additional comments: Sterling Mining continues to acquire and lease good silver properties.  
Timberline to Lease Montana Properties to Sterling Mining

I wrote an article on SRLM in late Dec. 2003.  See: Sterling Mining   (But I no longer own shares.)

Ray DeMotte really, really understands the silver story, and has been aggressively acquiring silver properties.   Sterling continues to consolidate its land position around the Sunshine mine.  

Sterling Mining acquired the Sunshine mine. Sunshine had “more than 360 million ounces of production over the past century” and was one of the big three: Hecla, Couer, & Sunshine. Sunshine went bankrupt. Sterling got the property a few months ago cheap, because they were quick & willing to pay cash. Other buyers wanted to do a full study before making an offer. 
The best factors, I feel, are as follows:
1. The Sunshine mine is an existing mine that was mining at a profit. The company went bankrupt, not the mine. So there will be no great capital costs for start up, only minimal costs. 
2. The Sunshine sits on 1/2 sq. mile, and was never fully explored. Sterling Mining owns 10 square miles of property surrounding the Sunshine, right in the heart of silver country, the location of CDE and HL, the other two big companies at the top of this list. 
3. The management of Sunshine understands the silver story. They are on a mission to acquire distressed silver properties at today’s cheap prices. See also: December 14, 2003: “In light of the continued low silver price, Sterling has this year begun holding back into inventory a portion of this year’s silver coins minted.”

For more detailed information on what’s happening in the Silver Valley in Idaho, see the following link:

(I own shares of SRLM.PK)

* CSG.TO CSGLF.PK (Capstone Gold) (I own shares)
Chris Tomanik IR (604)-684-8894
42.7 mil shares fully diluted (August 2004)
+ 16 mil in Dec. 2004 financing
58.7 mil shares fully diluted (Feb 2005)
@ $.99/share Cdn x .81 US/Cdn = $.80
$47 mil MC
$~6 mil Cdn, cash on hand.
They did a $9.1 million PP at $.75/share Cdn. in Jan 2004.
6 mil warrants at $1.00-$1.25 Cdn.
Projects all in Mexico, past producers.
Cozamin is the largest property (gold/copper), for which drill results will soon be announced.
Six properties (Still need about $12 mil to fully acquire 90-100% over next 5 years, minus 3% NSR 
“net smelter royalty”)
Cozamin: indicated:  2.8 mil T x 85g/t Ag (7.4 mil oz. silver), .5g/t Au (44,000 oz. gold)
+ inferred: 3.1 mil T x 103 g/t silver (10 mil oz. silver), .5g/t Au (48,000 oz. gold)
High Grades range from about 200-300g/t silver. (6.5 – 9.5 oz. tonne)  –across 5 properties 
Totals: (excluding Cozimin):  115 mil oz. silver, 2.3 mil oz. gold. (138 mil oz. silver equiv)
Grand total: (including Cozimin):  156 mil silver equiv. ounces
Exploration Potential: up to 500 mil oz. silver at Claudia (580 mil total?)
(will require about $5 mil to secure properties, and they recently raised $10 mil)
$47 mil MC / 156 mil oz. = $.30/oz.
$47 mil MC / 580 mil oz. = $.08/oz.
You may get “approx” 23.8 ounces in the ground for 1 oz. silver’s worth of stock.
Exploration Potential: 88

Additional comments:   PP Dec. 16th, 2004, 10 mil units at $.85, with a half warrant at $1.25, + 1 mil agent options.  Hold time expires April 16th, 2005

Research Report: Capstone Gold Corporation – written by Mike Kachanovsky August 30, 2004.

(I own shares of CSG.TO)

no web site
Phone: Magnus 1 (604) 261-6040
6.924 mil shares fully diluted (end ’03?)
@ $.40/share Cdn x .81 US/Cdn = US $.32
$2.2 mil MC
no debt
HDA’s proven and probable reserves stand at 161,000 tons of
ore grading an average 25.6 ounces per ton silver, and 10 percent combined
lead/zinc — 4.12 mil oz silver, not including the zinc & lead.
According to Magnus, the indicated and inferred reserves total about 180,000
tons at about the same grading — in other words, a further 4 million ounces of
~8 mil oz. silver
$2.2 mil MC / 8 mil oz. silver = $.28/oz.
You get “approx” 25.7 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments:  There is a significant lead/zinc bonus.  “The property could be put into production at a capital cost of Cdn $3.5 million — with payback of capital (when equity financed) within two years.” 

* ABI.V ABMBF.PK  (Abcourt Mines) (I own shares) Jeff Tremblay (IR)  (418) 575-1169 cell phone 
29.7 mil shares fully diluted (Jan 31, 2005)
@ $.21 share Cdn x .81 US/Cdn = $.17
$5 mil MC
no debt., North of Montreal., ~11 mil shares family owned.
proven reserves… not ready to be opened, re-opened perhaps in mid 2005?
–Abcourt-Barvue: Past producer, existing infrastructure: Put into production a second time, 1985-1990 for $20 million.
–Historic Resource: 19.3 mil silver ounces, 253,000 tons zinc
–Estimated cost to reopen the silver mine was (with the old plan) $35 mil Cdn: Estimated: 27.55% IRR, 98% return on equity, payback period of 2 years.
-The current plan is to do a summer drill program to expand resources.
 $273 million worth of zinc at .45/lb,  $108 million worth of silver at $6/oz, $45.6 mil worth of gold at $380
$5 mil MC / 19.3 mil oz. = $.27/oz.
You get “approx” 27 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments:  Jeff Tremblay and Renaud Hinse took a trip to Vancouver and San Franciso, and came out to Grass Valley, California my hometown, to meet with me late August, 2004.   They have been in business as early as 1977.  The mine last operated from 1985 to 1990.  In 1980, the stock price hit a high of $4.95/share.  In 1985, they raised and spent $20 million Cdn. to start production, and in 1990 production was put on hold due to low silver and zinc prices.

Imagine trying to run a business for 14 years with no revenue!  Yet, during that time, they have managed to keep the company debt free, and dilution to a minimum!  Yearly costs to keep the claims and equipment of this family-run mine are $100,000, so that has been their secret of survival.  

–looking to raise $5 mil to reopen the silver/zinc mine. 

(I own shares of ABI.V)

* MGN (MINES MGMT) (I own shares) (509) 838 6050 Doug Dobbs
12.4 mil shares fully diluted (April 2004)
@ $4.52/share 
$56 mil MC
261 mil oz. silver resources.  Previous drilling spent over $100 million drilling the property.   
$56 mil MC / 261 mil = $.21/oz.
You get “approx” 33.4 ounces in the ground for 1 oz. silver’s worth of stock.

Additional comments:  Mines Management continues to work toward permitting and developing the Montanore Mine, hiring engineers, filing permits, etc., and has issue no new shares in almost a year, since March, 2004.

The revised plan for developing the Montanore Mine envisions an operation processing 12,500 tons of ore per day, yielding approximately 8 million ounces of silver and 60 million pounds of copper per year at a cash cost of under $2.90 per ounce.  (At a capital cost of approximately $236 million.)  

“The cash operating costs of the project remain attractive at approximately $12.14 per ton, taking into account inflation offset by increases in productivity from improved mining methodology and technology.”

About 2-3 oz silver/ton, 0.75% copper.

As copper moves up 5 cents/lb., it adds $100 million to the value of the deposit.  
As silver moves up $.50/oz., it adds $130 million to the value of the deposit.

Mines Management (MGN) owned 10% of the rights to their property in Montana. The other 90% owner, Noranda, simply gave up on the property and walked away from their mining claim due to “perpetually” low silver prices and political concerns.   That explains the rocketing share price.  So, the MGN group got 90% of the rest of the property FOR FREE!–the value of which, and the nature of this transaction has just barely begun to be understood by the market, given the low relative price. 

Their property also has about 61% of the value (at current prices) in copper (copper recently at $1.43/lb.), 2 Billion pounds of copper, and 261 mil oz. of silver.  Doing the math: 
261 mil oz. silver x $6.70/oz. = $1.748 Billion. 
2 Billion lbs copper x $1.39/lb.. = $2.8 Billion. 
Total value of mineralization before costs to extract, $4.5 billion.  It was recently a high of: $4.8 Billion.   This number increased from around $3 Billion just a few months ago!  These numbers do not suggest a potential market cap value of the company.  The costs to extract that mineralization will be substantial, along the way.  However, if they are cost effective at today’s prices, and if metals prices double, then that is substantial profit, and creates the leverage investors seek.

They do not have an active working mine–which is a minus.  They will need to raise capital to get a mine going: $236 million current estimate.  

Regarding environmental concerns:  Noranda had a fully approved Environmental Impact Statement (EIS) that led to successful project permitting, so environmental concerns were not a factor in Noranda’s departure of the project in 2002.

For more on MGN, see

Mines Management has a new Message Board at Yahoo! Finance:

I own shares of MGN.  

* ASM.V ASGMF.PK (AVINO SILV GOLD) (I own shares.) 604 682-3701 — David Wolfin
10.5 mil shares outstanding. / 13.5 mil shares fully diluted (Dec. 2004)
17.5 mil shares fully diluted (including, and after the purchase of remaining 51% of the Avino mine)
@ $1.34/share Cdn x .81 US/Cdn = $1.08 US
$19 mil MC
from: –in 1997
“How Much Silver Does Avino Have?”
“Operations at Avino’s silver mine in Mexico are both open-pit and underground. I examined the reserves and interpolated the tonnage into silver ounces as follows: 28-million ounces proven; 50-million ounces probable and 27 million ounces possible.” (Not all are 43101 compliant reserves & resources.–that is an old, third party report.)
The Avino Mine operated from 1986 to 2001, producing about 497 tons of silver, 3 tons of gold, and 11,000 tons of copper.  That’s about 1.6 million ounces of silver, or about a million ounces of silver per year.
Avino produced 166 ounces of silver for every one ounce of gold.  At a 60:1 value ration, that means that the value of silver to gold is 2.76 times as much value (today and historical) is in silver than gold.
They actually have over five silver properties/projects.  I only have numbers for one, the primary Avino mine
= 28 + 50 + 27 = 105
Avino owned 49% of that, or 51.5 mil oz., prior to the purchase agreement for the remainder for an additional 4 million shares.
$19 mil MC / 105 mil oz. = $.18/oz.
You get “approx” 39.6 ounces in the ground for 1 oz. silver’s worth of stock.
Now, if the purchase deal does not go through, the numbers are as follows:
13.5 mil shares fully diluted (Dec. 2004)
@ $1.34/share Cdn x .81 US/Cdn = $1.08 US
$14.6 mil MC / 51 mil oz. = $.29
You get “approx” 25 ounces in the ground for 1 oz. silver’s worth of stock.

Addional comments:  It appears as if the Avino purchase is taking longer than anticipated.  That may be a warning sign, and perhaps why the share price backed down to about $1.30/share.

(I own shares of ASM.V)


In case you didn’t notice, the list of companies, above, that have significant measurable resources, is in reverse.  The worst companies, that are the most expensive with the least resources, are listed first, and the better companies, with more resources at least cost, are listed last, just above here.  The list is done this way on purpose for several reasons, as follows.  First, the best companies are in the middle of the report (burried).  Second, it allows the reader to see the many other options available before seeing these ones.  Third, this means that this list is less likely to have a “pump and dump” type effect.  So, you have to “scroll up” to see the list from this point.

——————————-    ——————————-    ——————————-    


Explorers deserve their own category, since they cannot be valued by the method of looking at reserves and resources of ounces of silver in the ground.  We do not know how many oz. they might have.  They are exploring for that.  A few explorers may also be producers, and they are both listed here, if they do not have significantly large well-defined resources.

This list, although at the bottom, in no way indicates that these companies are more highly valued, or less valued, than companies listed above.  There may be less certainty in the companies listed below, and more certainty in the companies above.

It is also difficult to categorize a company as an explorer, since all silver companies always hold more silver properties that need to be explored. IE, everyone is an explorer!

The list above is not a list of producers, the list above is a list of companies with significantly measurable resources in the ground.  Those below, generally do not.  Or, if they do have resource numbers, the numbers are very small compared to their much larger exploration potential, and thus, they are listed here.

(The order in this list is by largest market cap first, not by “comparative value” of the market cap divided by the resources, as above.)


52.5 mil shares fully diluted (spring 2004)
@ $2.59/share Cdn x .81 US/Cdn = $2.10 US
$110 mil MC
inferred resource: 45 mil oz. silver + 1 mil oz gold.
1 mil oz. gold = + 10 mil oz. silver equiv
“The estimate does not address significant additional mineralized structures known to be present on the property, or the potential for large strike extensions of known high-grade zones.”
February Financing was for the El Cubo Gold-Silver Mine is located in the Guanajuato gold-silver district in the Republic of Mexico. Historical reports cite district production at 1.2 billion ounces of silver and over 4 million ounces of gold. With capital spending and upgrades, and expect to produce up to 100,000 oz. gold equiv/year at $190/oz. At $400/oz, that may mean $210/oz. net profit, or $21 million positive cash flow/year, and yet, the purchase price was $21.5 million.  Seems like they bought a mine, at a price, with a profit potential, of a P/E ratio of 1.  
Target to expand the El Cubo project resource to over 2 million ounces of gold equivalent.  Given that historic production was 300 oz. of silver for each 1 oz. of gold, I think it’s odd that they speak in terms of “gold equivalent”.  Why not emphasize the silver???  Converting their target of gold back to silver, at their ratio of 65:1, gives 130 mil oz. “silver equivalent”.
55 + 130 = 185 “exploration potential”
$110 mil MC / 185 mil oz. = $.59/oz.  That’s an “exploration potential target” 

Additional comments: 
Gammon Lake is a large shareholder, 26.3%.  

Mexgold announced bonanza grade discovery on Jan 13th, 11 kilos per ton silver, over 2 meters.
Part of a section of “25.5-metres grading 1.16 grams per tonne gold and 961 grams per tonne silver.”

CDY CDU.V  (CARDERO RSCS)  Henk Van Alphen — President (604) 408-7488  
40.1 mil shares fully diluted (July 1 2004)
@ $2.57 US
$102 mil MC
($17 million Cdn cash in the treasury)

Additional comments:  Cardero has three silver properties in Argentina; two main silver exploration properties:  Chingolo and Providencia.  

Aug 17, 2004 Cardero Announces Results From Providencia
“Cardero is encouraged by these results although ongoing sample recovery problems remain a concern…”Providencia — high grades of silver, former silver mine, could have 100-250 mil oz.  ??

Chingolo — Henk says, “may have 400-600 mil oz. “exploration potential” in 200-300 mil tons of rock.”  They got 30-40 grams (1.23 oz.) on the first drill hole, but hope to find 2-3 ounces silver/ton.  

June, 2004: Company quote: “The Company is actively evaluating silver, gold, copper and iron-ore projects which will ensure the recognition of Cardero as a world-class exploration and development company.”

Cardero Provides Update on Iron Oxide Copper-Gold Projects in Peru–Whether it is cost effective to extract potentially $100 billion worth of iron minerals remains to be seen, and is the job of an explorer like Cardero.

1 604 684 8950
39.7 mil shares fully diluted. (Nov 2003)
@ $.39/share Cdn x .81 US/Cdn = $.32 US
$12.5 mil MC (US)
Additional comments: They own 5.82 million shares and 388,000 warrants of Cardero at $.35, which usually is a greater asset value than their market cap. Ascot’s share price is typically around 80% of the value of their Cardero Stock, and less liquid.)

Owns about $15 mil worth of Cardero Stock at closing prices on Feb. 11, 2005!

(I’m listing this one out of order, not by market cap, and next to Cardero, because of their position in Cardero.)

It may be better to buy Ascot than Cardero, depending on prices.  Check the math, and call Ascot to verify Cardero stock holdings, and number of shares.

* OTMN.PK (O.T. MINING) (I own shares) Jim Hess Tel: 514-935-2445
12.8 mil shares fully diluted  (May 15, 2004)
@ $4.20/share
$54 mil MC
The O.T. Mining Corp. Diamond Drilling Intersects Porphyry Copper Mineralization; New Claims Staked and Additional Patented Claims Acquired

Excerpt: The mineralized zone occurs between 665 feet and 1916 feet below surface (which is the current bottom of the hole), for a mineralized intercept of approximately 1251 feet. Alteration intensity, chalcopyrite concentrations, and the width of quartz/sulfide veins and replacements increase with depth. The hole remained in copper mineralization and associated alteration to its final depth of 1916 feet, when it was halted due to restrictions on winter drilling required by the U.S. Forest Service. O.T. intends to re-enter and continue the hole as soon as possible in 2005 to determine the vertical extent of this mineralization.The O.T. technical team feels that these results are very significant geologically, and interprets the mineralized drill intersection to be representative of “porphyry copper-type” mineralization. Porphyry deposits commonly form large tonnage, bulk mineable zones containing copper, molybdenum and gold. The mineralization at nearby Butte, Montana (known as the “Richest Hill On Earth”) is one such porphyry copper deposit.

Historic silver production for the Butte district, from 1880 to 2000 was 714,643,005 oz. silver.
They think their deposit may be bigger than “the richest hill on earth”, which is located near their property, in the Butte district.  
The exploration potential for this company is astounding, if they are right.

I’m anxiously awaiting lab results of the 1251-foot mineralization core sample.

“The Ruby property encompasses the past-producing high-grade Ruby gold-silver deposit which produced an average of 2.44 ounces per ton gold and 38.66 ounces silver per ton.  A 193 ton bulk sample of a high-grade base metal mineralized zone associated with the Ruby deposit returned 7.6% lead, 5.19% zinc and 1.31% copper per ton.”

“…This deposit is situated adjacent to the Ruby property and according to old reports contained 0.88-34.28 ounces per ton gold, 35-527 ounces per ton silver, 1.96-11.84% lead, and up to 5% copper.”

It’s ‘Our Turn’ For Silver
by Greg Kyle June 16, 2004

Here is a comparatively busy message board for O.T. Mining:

A nearly abandoned message board for O.T. Mining:

I own shares of OTMN.PK

53.6 mil shares fully diluted Aug 9th, 2004  
@ $.79/share Cdn x .81 US/Cdn = $.64 US
$34 mil MC
Scorpio’s recent March 2004, $16 million financing was at $2.25 Cdn/share!
— The Nuestra Senora Project: (the Candelaria deposit): Total Measured & Indicated: 131,058 tonnes @ 520.94 g/t Ag = 2.1 mil oz. of high grade silver, 16 oz./ton. Inferred: 49,468 tonnes @ 658.98 g/t Ag (21 oz./ton) = 1 mil oz. silver
–the Cochrane Hill Gold Deposit: The total Indicated Resource ~ 112,460 contained ounces of gold.
Total: 4 mil oz. silver equiv. 

Dianne (IR) Phone: (403) 265-4356
400.5 mil shares fully diluted (June 14 2004)
@ $.115/share Cdn x .81 US/Cdn = $.09 US
$37 mil MC
“The company has a policy of not hedging or entering into forward sales contracts.”
Cash flow positive. + 2.5 % royalty on “Rapu Rapu” that should be worth about $1 million per year starting within 9-12 months.  (a cash source for an explorer is a big plus)
14 projects in the Philippines.
Producing a dore bar of 96% silver and 4% gold from Canatuan project with the following:
Total silver = 7.1 mil oz silver
Total gold = 182,000 oz. gold x 10 (@10:1) = 1.8 mil oz silver equiv.
Total silver equiv (Canatuan) = 8.9 mil oz.
+ they own a drilling company with 20 rigs.
+ they have a “foot in the door” in China.
+ many other promising exploration properties in the Asian Pacific.

Additional comments:  TVI Pacific Inc. Announces Closing of $2,288,788 CAD Private Placement Financings Monday June 14

TVI exploded in price from 16 cents to 23.5 cents when they announced that they would be mining in China: “TVI Pacific Inc. Receives Landmark Approval for Wholly Foreign-Owned Enterprise (WFOE) Status From Chinese Government”. see

They are primarily a silver explorer.  The bonus is they are a producer, and are cash flow positive, which are both extremely rare for an explorer.  In fact, the other producers mostly all lose money! 

* MMGG.OB (METALLINE MINE) (I own shares) Merlin Bingham 208-665-2002 
21.6 mil shares fully diluted (April, 2004) (only 2 mil options and warrants)
@ $1.50/share US
$32 mil MC
$5 million cash on hand, July 31, 2004

Additional Comments:  
Metalline Mining Company Sierra Mojada Project Update
Monday September 13
“The first drill was mobilized in January 2004 with additional drills added April through July to the present 4 drill program. To date, 160 holes have been drilled with a total of 15,602 meters drilled.

Reserva International of Reno, Nevada has completed a block model evaluation, using GEMCOM mine modeling software, of the oxide zinc mantos diamond drill, channel sample and percussion drill data. The block model result for the Iron Oxide (Red Zinc) manto is 22.6 million metric tons grading 8.11% using a cut off grade of 5%. “

1 metric tonne = 2 204.62262 pounds
8.11% x 2204 pounds/tonne = 178.7 pounds/tonne 
178.7 pounds/tonne x 22.6 million metric tonnes = 4039.6 million pounds of zinc.

@ $ .59/lb, that’s $2.4 billion dollars worth of zinc, and who knows how much silver.

This press release is very understated, using no superaltives.  They found exactly what they were looking for, 4 billion pounds of zinc, and they are drilling for more, which I find very exciting.  Their latest quarterly also includes a statement of the historical production, right below: 

Zinc & Silver in Mexico: Sierra Mojada.  Sierra Mojada is a Silver District!
“The Sierra Mojada Property has produced in excess of 10 million tons of high-grade ore that graded in excess of 30% lead, 20% zinc, 1% copper and 1 kg (31 ounces) silver per ton that was shipped directly to the smelter. The district has never had a mill to concentrate ore. All of the mining was done selectively for ore of sufficient grade to direct ship; mill grade ore was left unmined.”
(That’s 310 million ounces of silver.  Who knows how much silver is left?)  That’s the question with an explorer.

–Potentially the lowest production cost in the entire zinc industry due to new “oxide deposit” chemical extraction process as revolutionary as “heap leaching”.  

For more, see the research works article here:

(Merlin of MMGG.OB, and Harlan of EXR.V (friends) both have reports that will educate you on the bullish story for Zinc.)

I own shares of MMGG.OB

450 mil shares and options (Feb., 04)
@ $.115/share 
$52 mil MC
This stock seems extremely volatile in price, with low liquidity, ranging from 7 cents to 13 cents.
Total resource: 56 million oz. –from 2004 annual report.
Will soon become a producer.
The company is debt free, but has an “equity line of credit of $10 million” so that they can issue shares for money to a certain group.  This may explain the wild changes in share price.  The potential investors want a lower share price for any new financings!  
Also, Macmin has several multi-million oz. potential projects.

News article in Australia on MCJAF

ECU.V ECUXF.PK (ECU SILVER MINI) —  site under construction, and under review by the exchange. (819) 797-1210
= “145 mil shares fully diluted-about” verbal, from IR dept. (Sept. 9th, 2004)–including “about 5 mil shares in Sept 21 financing.”
@ $.28/share Cdn x .81 US/Cdn = $.23
$33 mil MC
ECU.V is also exploring other gold properties.

ECU Silver announces today the closing of a private placement resulting in gross proceeds of $7,000,000 received in four (4) installments by ECU Silver.

Pursuant to this private placement, ECU Silver issued an aggregate of 24,137,931 units at a price of $0.29 per unit, each unit being comprised of one (1) common share in the share capital of ECU Silver and one third (1/3) of a common share purchase warrant, with each whole common share purchase warrant entitling its holder to acquire one common share at a price of $0.35

ECU is now a producer:  “Production at ECU Silver’s milling facility in Velardena has been averaging 200 tonnes per day since production resumed in early August and ECU Silver is in the process of increasing this production output to approximately 250 tonnes per day by the end of the month of September.”

235 mil shares fully diluted 1 Q 2004
@ $.175/share Cdn x .81 US/Cdn = $.14
$33 mil MC
American Bonanza Acquires High Grade Silver Property in Nevada & Goldcorp Exercises Warrants

MAI.V MNEAF.OB (MINERA ANDES) (604) 689-7017 Art Johnson
90 mil shares fully diluted (April, 2004)  
@ $.62/share Cdn x .81 US/Cdn = $.50 US
$45 mil MC
Raised $6.6 mil in recent financing.
owns 49% of the resource: “55 mil silver equiv. oz. resource” back in 2001.  AT 60:1 silver:gold when gold was about $300/oz., about half/half silver and gold.  
Estimated:  16.7 mil oz “silver equiv”
15 mil oz. silver + 1.7 mil oz. “silver equiv” of 170,000 oz. of gold.
They will be exploring for more: (The resources may be only 10% of the property.)
2.2 km stretch, open another 2.7, plus 3 other vein systems.  significant high grade silver exploration potential.  7000 meters of diamond drilling.  Plus a copper project, billion ton ore deposit.

Additional comments: Underground Development Work At Minera Andes San Jose Project Discovers High-Grade Gold And Silver Mon, Jul 12  “12,403 g/t (399 ounces per ton) silver”

Minera Andes plans to “fast track” to production.  Expecting $.17-$.18/share Cdn earnings/year, as of April, 2004

Minera Andes Inc.: New Huevos Verdes East Drilling Intercepts Multiple Zones With Up To 63 g/t Gold And 1,690 g/t Silver – CCNMatthews

Minera Andes has several significant bonuses that my method is not valuing properly.  First, I undercount the gold, of course, so consider there is a “gold bonus” at current gold prices.  Second, they will be doing significant exploration work to increase their resources, and they have recently raised the money to be able to pay for that exploration work.  Third, they have a copper project, and copper prices are rising.  I moved MAI.V to the explorers list to be more fair to their valutation.  

* EDR.V EDRGF.PK (ENDEAVOUR SILVER) (I own shares) Hugh Clarke, Investor Relations 1-877-685-9775
25.6 mil shares fully diluted (Jan 1, 2005)
@ $2.06/share Cdn x .81 US/Cdn = $1.67
$43 mil MC
As of May 28th, 2004, they have $9 mil Cdn cash.
If all options and warrants are exercised, they will have another $9.8 mil Cdn in cash.
They believe there may be a chance they will not need to dilute further to develop current silver production plans at the Santa Cruz Mine.  Endeavour is not a “resource” play, but rather, a “production” play on silver.  They are listed with the explorers because they do not have large drill results or a resource calculation outlining significantly large resources–they have only around 5 million ounces is all.  But so they don’t have a “prospective” mining property.  Instead, they have a working mine!  Like Hecla.
–currently producing 600,000 oz. silver/yr.
–plans to increase production to 4,000,000 oz. silver/yr 

Endeavour Intersects High Grade Silver Mineralization in North Porvenir Zone, Santa Cruz Mine, Durango, Mexico
Tuesday October 12

I own shares of EDR.V

CAUCF.PK (CALEDON RES)    George Salamis – Managing Director
180,721,142 Shares Outstanding – 
@ .15 at Yahoo! 
(Mining in China)
It trades on the London Stock Exchange, under the symbol, CDN
$27 mil MC

CBE.V CBEFF.PK (CABO MINING)(I own shares) (604) 681-8899 John Versfelt, President
34.7 mil shares fully diluted (Oct. 2004)@ $.79/share Cdn x .81 US/Cdn =  $.64
$22 mil MC

Additional Comments: 
Cabo Announces $1,000,000 Flow-Through Private Placement (at $.80/share)

Cabo’s drilling acquisitions are now profitable, and providing cash flow.

Drilling Services are in extremely high demand, and Cabo can charge up to 25% more this year than last year.

I wrote an article on Cabo on February 10th.  Market Perspective & Cabo Mining – Hommel

In the article, I highlight what I feel is Cabo’s most imporant asset:  Their property in Cobalt, Ontario.  The “silver capital of Canada” produced historically, over 500 million ounces of silver. 

To learn more about the mining camp town of Cobalt, there is a fascinating article detailing the history of the silver camp at

I own shares of CBE.V

SDR.V SDURF.PK (STROUD RSCS) Mr. George E. Coburn, President Tel: 416-362-4126
99 mil shares fully diluted (Oct, 2004)
@ $.255/share Cdn x .81 US/Cdn = $.21
$20 mil MC
JV partner with APM.V on Santo Domingo Silver Project in Mexico.
10oz. silver/ton x 22,000 tonnes. minimum…
150 to 300 mil oz. exploration potential of the deposit.
ownership is between 30-50%, so… 30% of 150 mil oz.= 45 mil oz., and 50% of 300 mil oz. = 150 mil oz.
$20 mil MC / 45 mil oz. = 
$20 mil MC /150 mil oz. = 

* APM.V (Amerix Precious Metals Corp) (I own shares)
50 mil shares fully diluted
@ $.46/share Cdn x .81 US/Cdn = $.37 US
$19 mil MC
APM.V has a gold deposit in Brazil that’s bigger than the silver project in Mexico.
” If the deposit extends to considerable depth, as do many of the silver deposits in the region, it is reasonable to assume a deposit of 300 million ounces of silver.” 
Stroud Resources, JV partner, lists the deposit at 150-300 million oz.
APM.V partners with SDR.V
APM.V to get a 50-70% interest. 
50% x  150 mil oz.= 75 mil oz., 70% x  300 mil oz. = 210 mil oz.
$19 mil MC / 75 mil oz. = 
$19 mil MC / 210 mil oz. = 

(I own shares of APM.V)

Jay Oness Toll Free: 1-888-456-1112
60.6 mil shares fully diluted 
@ $.35/share Cdn x .81 US/Cdn = $.28 US
$17 mil MC

Additional Comments:  three main properties in North America.
The main exploration project is the Nieves, near the massive Fresnillo silver mine, owned by Penoles ($2 billion market cap).

Quaterra Resources Inc.: Drilling at Nieves Intersects High-Grade Silver Aug 12
(129.3 ounces/tonne) over 1.5 metres
” The company said the results demonstrate that the Nieves mineralized system continues to have potential for development of Fresnillo-style underground high grade veins, and for bulk tonnage silver mineralization.”

QTA.V is a Sister Company to Western Silver, WTZ above.  
See also Bravo Venture, BVG.V, another sister company, with 34.5 mil fully diluted shares (April, 2004)

PXI.V  PNXPF.PK (Planet Exploration Inc.)
30.8 mil shares fully diluted (Jan. 2004)
@ $.50/share Cdn x .81 US/Cdn = $.40
$12 mil MC
Planet holds an option to acquire a 100% interest in the high-grade 7,005-hectare Copalquin gold/silver property located in Durango, Mexico.
“Resource estimates on the property have not been calculated since the discovery of the high-grade vertical fault zone, its existence may significantly alter Kennecott’s and Fransisco Gold’s original target potential of one million ounces of gold and 50 million ounces of silver based on their interpretation of a low-grade horizontal quartz breccia formation.”

Fred or Grant Brackebusch 
23.9 mil shares fully diluted Apr, ’04
@ $.48/share US
$11 mil MC 
 New Jersey Mining Company (NJMC) is engaged in exploring for and developing gold, silver and base metal ore reserves in the Coeur d’Alene Mining District of northern Idaho also known as the Silver Valley – one of the world’s richest silver districts.

30.5 mil shares fully diluted (July 29, 2004)
@ $.51/share Cdn x .81 US/Cdn = US $.41
$13 mil MC 
“Esperanza Silver Corporation is solely dedicated to the identification, acquisition and exploration of new silver projects.”   Looking for high grades.

29.1 mil shares fully diluted (Aug 1, 2004)
@ $.99/share Cdn x .81 US/Cdn = US $.80
$23 mil MC

Additional comments:  –“MAG Silver Corporation enters the silver market as a powerful force. MAG combines a seasoned management team with two drill-ready geological extensions of high-grade world class producing districts. MAG controls 100% of the Juanicipio property adjacent to the Fresnillo District in central Mexico, currently producing over 12% of the world’s silver from high grade underground vein structures.”

The geologist, Peter K.M Megaw, is also working with EXN.V, another high grade silver project.  Peter’s philosophy was that it makes sense to go after very high grade silver projects that will be profitable regardless of the silver price. 

MAG Silver Commences 3000 Metre Drilling Program at Juanicipio and Lagartos Near Fresnillo June 10

144 mil shares fully diluted (Aug 27, 2004 corporate profile)
@ $.185/share Cdn x .81 US/Cdn = $.15 US
$22 mil MC
indicated = 63,400 t x 2738 g/t x .03215oz./g = 5.6 mil oz. silver
inferred = 2100 t x 1,433 g/t x .03215oz./g = .1 mil oz. silver
“gross in-situ value of mineralization is $31.4 million.” 
EXN to own 51% of the project.  Apex is the joint partner. 51% x 6.2 mil oz. = 3.16 mil oz.

Additional comments: “Excellon …is exploring and developing”…. “a Bonanza grade Silver deposit in Mexico.”   The geologist, Peter K.M Megaw, is also working with MAG.V.  

Excellon completed a 9000 unit financing for $9.9 million. A “silver debenture”.  The holders of each unit can opt to receive cash or silver bullion based on 200 oz. of silver per U.S. $1100.  Thus, Excellon has “hedged” and pre-sold 1.8 million ounces of silver at $5.5/oz.  Each unit also comes with 1000 warrants for Excellon stock at $.325.

Excellon hopes to be able to pay back this “silver debt” within perhaps about 2 years, and they believe they have much more exploration potential.

SRY.V (STINGRAY RSCS) (416) 368 6240
17.1 mil shares fully diluted (may 28, 2004)
@ $.86/share Cdn x .81 US/Cdn = $.70
$12 mil MC- Current projects centered in the Sierra Madre Belt of Mexico 

SML.V SMLZF.PK (STEALTH MNRLS) 604-306-0391 Bill McWilliam, Chief Executive Officer
48 mil shares  (August 31- 02)
@ $.16/share Cdn x .81 US/Cdn = $.13
$6 mil MC

Toll-free 1-888-805-3940 or (604) 682-0557
29.2 mil shares fully diluted (July, 2004)
@ $.78/share Cdn x .81 US/Cdn = $.63 US
$18 mil MC
Recently completed a $2.3 million financing for exploration.
Kenrich Eskay’s “Cory” property (25,000 acres, 100% owned) is 10km south of Barrick’s silver property, Eskay Creek, which is “the fifth largest silver producer in the world”, with a reserve “at the beginning of 2001, 1.42 mil tons, grading 1.5 ounces/ton of gold, and 68.3 ounces/tonne of silver, 3.2% lead, 5.2% zinc.–That’s Barrick’s Eskay Creek property.  Kenrich Eskay is hoping to find something similar nearby. (See 5th slide of
70% of the rights to The Property was once almost bought by Homestake (which was acquired by Barrick) for $35 million in 1996, and Homestake was going to fund all exploration and development.  The buy out ended when metals prices collapsed, and Bre-X hit, and when the majors cut back on exploration budgets to stay alive.   This means the market cap of KRE.V may be worth 100% / 70% x $35 million, or $50 million, plus exploration and development costs, to a major mining company, and likely worth much more today, due to inflation of the dollar, and the rise in the price of silver!

I own shares of KRE.V 

39.2 mil shares fully diluted
@ $.75/share Cdn x .81 US/Cdn = $.619 US
$24 mil MC
–About 6 properties in Peru  

* KG.V KDKGF.PK (KLONDIKE GOLD) (I own shares)
As of Feb 12, 2005, an 8.2 Mil. pp is being processed and will close soon. This would make 84,228,910 shares outstanding and a fully diluted amount of 117,643,910 shares. 
@ $.12/share Cdn x .81 US/Cdn = $.10 US
$14 mil MC
This company has many silver and gold properties.  Klondike has one silver property that could be producing within weeks.

(I own shares of KG.V)

* CMA.V CRMXF.OB (Cream Minerals Ltd) (I own shares.)
34.8 mil shares fully diluted (March 31, 2004)
@ $.27/share Cdn x .81 US/Cdn = $.22 US
$7 mil MC
Project B:  Potential Target: 400m x 500m x 150m x 2.5 t/m3 = 75,000,000 tonnes
Say at: Au 0.480 g/t Ag 149.33 g/t
Silver only, that’s (1 gram = .03215 troy oz.) 4.8 oz./t x 75 million tonnes = 360 million oz. “exploration potential” in a low-grade deposit.
$7 mil MC / 360 mil oz. = $.02/oz. (exploration potential) –not yet even a “resource”! 

Additional comments: Another silver property is the Kaslo.
“The Kaslo Silver Property encompasses the Keen Creek Silver Belt and is comprised of nine former high grade silver mines”…

(I own shares of CMA.V)

William Campbell, president (800)222-1505
“2.3 million shares outstanding, positive working capital, (making money & profitable) and no debt”
@ $3.00/share US
$7 mil MC
Historic estimate: “defined Conjecture mineral reserves of 706,000 tons grading 11.8 ounces per ton (oz/t) silver”
— the Conjecture Mine, with a lease-option agreement signed with Shoshone Silver Mining Company
= 8.3 million ounces of silver (leased out)  Since Chester will be receiving royalties, it makes it harder for me to value this company.

25.6 mil shares outstanding (3q 2003 report June, 2003)
@ $.40/share Cdn x .81 US/Cdn = $.32
$8 mil MC
MacMillan Gold Hits Ore Grade Gold and Silver Mineralization at the Cerro de Oro –July 26.
Hole 54 which intersected from surface 41.1 m. of 1.44 g Au/t, 119.9 g Ag/t, 1.73% lead and 1.55% zinc.

GPR.V GPRLF.PK (GREAT PANTHER RES) Robert Archer, President, & Kaare Foy CFO: 604 608 1766 
25.9 mil shares fully diluted (8-20 news release, 2004)
@ $.41/share Cdn x .81 US/Cdn = $.33
$8.6 mil MC
“Great Panther Resources Limited has combined experienced management, access to capital and high quality projects in Mexico. Silver and gold prices gained 26% and 21% respectively in 2003 and GPR intends to leverage this through the acquisition and development of high quality silver and goldprojects.”
–Option on the Topia Silver Mine in Mexico, formerly owned by Penoles, closed in 1999.  Est. 5 years worth of resources left. needs payments totaling about $2.5 million over 3 years.

38.8 mil shares fully diluted (June 23, 2004)
@ $.37/share Cdn x .81 US/Cdn = $.23
$12 mil MC 
Foremore project, 45km north of Eskay Creek

EGD.V EGDMF.PK (ENERGOLD MINING)  Fred Davidson President (604) 681-9501 
16.8 mil shares fully diluted  (June 30, 2002)
@ $1.34/share Cdn x .81 US/Cdn = $1.08
$18 mil MC
“advanced silver project in Mexico”  Real de Belem — property has “all the permits required for the commencement of a 200 tonne per day mining operation.” A range of 571 to 3,713 g/t Ag. (may not conform to Canadian NI43-101 standards.) A 16 hole, 1500 m drill program is currently underway.  At any time during the currency of the Option Agreement, Energold will have the right to acquire a 100% interest in the Real de Belem project for an additional US$5.0 million.
See Impact Minerals, below, of which Energold owns a controlling interest.

32.4 mil shares fully diluted
@ $.205/share Cdn x .81 US/Cdn = $.17
$5.4 mil MC 
Additional comments:  Silver Explorer in Mexico in the the Sierra Madre mountains: Uruachic.
They hope to take a collection of old silver mines and make them open pittable.  They have some very high grades from chip samples from the tunnels, ranging from 100g to 500g all the way up to around and over 1000g/ton of silver.

Michael Townsend, President Toll Free: 1-866-669-9377 Richard one of the IR guys.
38.7 mil shares fully diluted? (Jan 7, 2004)
@ $.085/share Cdn x .81 US/Cdn = $..07 US
$3 mil MC
see also Teuton Resources Corp (TUO.V)
see also Minvita MVE.V MVTAF.PK MINVITA ENTERPRISES (Not yet on this list, it’s also soon to have a name change to “Silver Grail” see
–involved with 7 exploration projects, one near the Eskay Creek Silver Mine, one in China.

Company contact: Bill Hoyt, director. 785-383-9246
4.88 million shares outstanding.
@ $.65/share
$3 mil MC
The Company has acquired seven mineral prospects to explore. These prospects are located in Nevada, Idaho and Montana.
Timberline to Lease Montana Properties to Sterling MiningThu, Aug 26 – Business Wire
The Montana property is near the property owned by Mines Management.  
Silver Property: Minton Pass project: 20 claims containing Revett formation silver/copper project in Northern Montana.  At least 5 drill holes were drilled on or near the claim group in the 1970s and 1980s.  A 1971 geologic report indicates that mineralized outcrops of Revett quartzite containing bornite and other copper minerals could be traced for about 1 mile along strike of the outcrop.A short adit was driven to expose the mineralization.Sampling results showed a stratographic thickness of 16.7 feet that averaged .7% copper and 1.78 opt silver.
Detailed work plans are under development, pending acquisition and study of prior exploration data.

Dino Cremonese, P.Eng. President (604) 682-3680
23.3 mil shares fully diluted (July 14, 2004)
@ $.165/share Cdn x .81 US/Cdn = $.20
$4 mil MC
Teuton & Lateegra Report Del Norte Silver-Gold Drill Results Oct. 2004
–high grade vein drill samples,  half the value in gold, half silver at 60:1 ratio.
“Management of Teuton and Lateegra are highly encouraged by the prospective results from the Del Norte exploration to date
located in the Eskay Creek region”

* PDO.V (
PORTAL RESOURCES LTD) (I own shares)  Phone: (604) 629-1929 Reg Advocaat 
11.7 mil shares fully diluted (Feb 2005)
5 mil shares owned by management!
@ $.75 Cdn x .81 US/Cdn = US $.61
$7 mil MC
Private Placement on Dec 21 at $.75 Cdn.
PP on Oct. 20 at $.75 Cdn.
In Argentina, in Chubut Province, Arroyo Verde Gold/silver Project.  Option to own 100%, need about another $1 mil or less to exercise option.  Property was explored a bit, and now, will be re-explored.  Planning to do a 3000-meter reverse-circulation drill program, to go deeper, looking for the “boiling point”, hopefully a wider higher grade area..  –Possible open pit, no historic workings, 200km to the east of IMA’s properties.  The property was formerly owned by Minera Andes recently, and Pegasus, who ran out of time and money at the bottom of the market in 1999.  
In Argentina, in Mendoza, San Rafael project (Gold and copper in Argentina) 700 sq. mile prop., 30 drill targets…

Portal Resources Ltd.: More High Grade Assays at Arroyo Verde
(I own shares of PDO.V)

* AUN.V AUNFF.PK (Aurcana Corp) (I own shares) — NEW updated website  CEO Ken Booth 604-331-9333
42.7 mil shares fully diluted (Sept 2004)
@ $.06/share Cdn x .81 US/Cdn = $.05 US
$2 mil MC
Cash $650,000 Cdn, no debt
Drilling to commence on high-grade, gold-silver targets. (in Mexico)
6 properties.
Real de Catorce–Historically, more than 220 million ounces of silver was mined from five 
million tons of ore on this property, approx. 48 ounces of silver per ton

(I own shares of AUN.V)

2.75 million shares issued
@ $.85/share
$2.4 mil MC
Claim between CDE and the old Sunshine mine.
JV with CDE subsidiary untill 2017.  ASLM to receive 20% net royalty, & if silver prices reach $16.50 an ounce or above, the profit sharing goes to 40%.  
Coeur d’ Alene, Idaho

66 mil shares fully diluted Jan, 2004 (From Dec 11, 2003 press release and 2002 report)
@ $.06/share Cdn x .81 US/Cdn = $.05
$3 mil MC
Company Reports that A. C. A. Howe International has been Contracted to Prepare a Resource Estimate for the 6 Areas of Drill Intersected Gold/Silver Mineralization on the Mabel Property

16.3 mil shares outstanding 
(fully diluted?)
@ $.185/share Cdn x .81 US/Cdn = $.15 US
$2 mil MC
Bonanza grade “grab samples” in southern Argentina near IMA.  
32 oz./T gold and 22 oz./T silver grab samples.  

GRG.V (GOLDEN ARROW RESC) (I own shares)
Sean Hurd (800) 901 0058 (604) 687-1828 (same # as for IMR.V, which spun off Golden Arrow)
4.3 mil shares outstanding.–number from Sean Hurd.
$750,000 Cdn in the bank.
@ $.87/share Cdn x .81 US/Cdn = $.71
$3  mil MC
35 exploration properties
Argentine & Peru Property portfolio
–Spun off from IMR.V (IMA Exploration)  

I own shares of GRG.V

MTB.V (Mountain Boy Minerals Ltd)
TEL: (250) 636-9283
17 mil shares fully diluted  (July 2004)
@ $.20/share Cdn x .81 US/Cdn = $.16
$3 mil MC
high grade samples:  3640 g/T Ag to 45.5 g/T Ag

17.2 mil shares fully diluted
@ $.14/share Cdn x .81 US/Cdn = $.11
$2 mil MC
Silver projects:
Yukon –grab sample of 611 g/t Ag
Argentina –samples from 31 to 5640 g/t Ag

CLZ.V (Canasil Resources Inc )
22.4 mil shares fully diluted (July 2004)
@ $.10/share Cdn x .81 US/Cdn = $.08
$2 mil MC
Exploration properties in Mexico and B.C.

IPT.V IMPJF.PK (Impact Minerals)
Frederick W. Davidson, President (604) 681-9501
12.5 mil shares fully diluted (From website, Sept. 2004, but date unknown)
@ $.42/share Cdn x .81 US/Cdn = $.34 US
$4 mil MC
IMPACT is exploring the extensive Zacualpan Silver Mining District in central Mexico. IMPACT signed agreements that include options on two operating mines and a processing plant.

LSM.V LASCF.PK (Langis Silver & Cobalt Mining Co Ltd)
no web site: Patrick Sheridan Jr. President and Secretary-Treasurer Phone: (416) 628-5936
11,565,890 issued and outstanding common shares. (not fully diluted)
@ $.16/share Cdn x .81 US/Cdn = $.13
$2 mil MC

Guilford Brett, IR (604) 682-2421
11.2 mil shares outstanding (not fully diluted) (Jan 1, 2004)
@ $.12/share Cdn x .81 US/Cdn = $.10
$1 mil MC

–CBP.V is the smallest market cap silver stock that I know of. It is truly a “penny stock”.

Final Category: Silver stocks FOR YOU and I TO RESEARCH further:

These are companies that may have good exposure to silver, but that I cannot determine the market cap, because I cannot find the number of issued and outstanding, or more importantly, fully diluted shares.

Sino Silver Corp (SSLV.OB)
1-888-471-SINO or 604-699-8622

Brian Testo
Phone: (780) 693-2365

Lixus Gold: www.lixusgold.comA geological report conducted for Cobre Valley Mineral Recovery Co. in 2000 investigated these two properties as well as an adjacent holding. The report concluded through surface and underground assays and measurements that probable reserves on the two properties under acquisition are from 3 million to greater than 10 million tons grading 6 to 12 opt/AG.

Ray Brown, 530-873-4394
Andrew Beyer (909) 587-8072
@ $.029/share 
You get options and leases … and an unknown debt and share structure…

Rivet silver  
Doug Warte & Frank Duval 509 921 2294

Grand Central Silver Mines Inc (GSLM.PK)
Malachite Resources MAR.AX

Mascot Silver Lead Mines MSLM.PK
Coeur d’ Alene, Idaho
“Though we have reserves and could conceivably mine them, it frankly makes no sense to do so at current prices. … The end of the silver bear will bring a number of the now-dormant small companies back to life…”
New President, still trades under $.25/share.

Silver Buckle Mines Inc (SBUM.PK)
Coeur d’ Alene, Idaho

Merger Mines Corp (MERG.PK)  –Leased by Sterling Mining, who is exploring their property, 
and owns 14% of  Merger stock.
2.7 mil shares outstanding.  (Sept, 2004)
Coeur d’ Alene, Idaho

Signal Silver –hopes to trade by next year.

Mineral Mountain Mining Company
Delaine Gruber, 208-664-3544
Coeur d’ Alene, Idaho

Independence Lead
Coeur d’ Alene, Idaho

Metropolitain Mines Ltd (MEMLA.PK) –next to the Sunshine in Coeur d’ Alene, Idaho

Silver Bowl
Coeur d’ Alene, Idaho
–working to get a new stock transfer coompany 216,559,942 Fully Diluted shares
oxus will spin off:  Khandiza is a high-grade zinc, silver, copper and lead deposit located in the Sariasia region of southeast Uzbekistan.

Silver Mountain Lead Mines Inc (SMLM.PK)

Silver Verde May Mining Co (SIVE.PK)

Silver Surprize Inc (SLSR.PK)

Standard Silver Corp (SDSI.PK)

Horn Silver Mines Co (HRNS.PK)

Andean American Mining Corp AAG.V ANMCF.PK
–concentrates solely in Peru
Peru currently stands as the largest gold producer and second largest copper producer in Latin America as well as the second largest silver producer in the world.

Here are a few more stocks to look up.  I don’t even know if some of these are silver miners.

Lfex – Lucky Friday Extention  
Kcpm – King of pine creek
Vins – vindicator silver,  

Royal Silver Mines (RSMI)
Bunker Hill– owned by new bunker hill mining company, stockpiling ore.
New Era

Articles like this one, that present opportunities like these, can tend to move the markets in these stocks. So, be careful when buying. If you place any market orders at the open for any of these small stocks, you might end up buying at prices that are significantly higher than you intended.  Limit orders might be better, but then, you run the risk of your order not being filled if the stock price exceeds your limit.  And bid / ask spreads such as 15% on small cap silver stocks are not unusual.  Markets can especially be moved given the wide readership on the internet. I’ve seen markets moved even by small private newsletters such as and (I subscribe to both). Some of these stocks can move up 15%, 30%, 50% or even over 100% in a single day. Thus, valuations can change very, very quickly. So, be careful, and re-check the numbers if the prices move up. Do your own math.

Also note, the majority of these companies have an emphasis on silver.  Most silver is produced as a by product of other mining, like lead or zinc or copper mining.  Those companies that primarily produce other minerals are not featured in this report.  This also helps to explain and prove, that silver is undervalued.  If silver miners cannot mine silver profitably, and this report shows that to be true, then something is wrong with the silver price.  It must go higher.

This report, and my method of valuing silver companies, depends on a much higher price for silver than exists today to be most accurate and most successful.  If silver prices go up significantly, my picks will do well.  If silver prices remain flat, then many of my picks should not do well.  

To learn more about the silver market:

Blanketpower’s Mining Links for Investors
Check out the Silver Forum at
 — Bill Bonner is the author of a free daily market commentary newsletter.  

For information from the SEC on how to protect yourself from a “pump & dump” scam, see

Many people have told me that they don’t get information this good even when they sign up for annual newsletter subscriptions from others that cost from  $100 – $300.  

The beauty of the internet is that it is helping knowledge to increase, and it is a form of communication that those who commit crimes of monetary fraud upon us cannot control.  Please make the most of it, and please forward this on to others. 

Jason Hommel

Final Disclaimer:  I have not received any compensation from any public silver stock company for writing up my weekly report on “Silver Stocks–Comparative Valuations”.  I own shares of the following 25 silver stocks, in no particular order: ABI.V, YZC.V, MVE.V, SRLM.PK, APM.V, CFTN.PK, IMR.V, ABI.V, CSG.TOGRG.V, ASM.V, CMA.V, PLE.V, PDO.V,AUN.V, EDR.VKG.V, MGN, CBE.V, SVL.V, MMGG.OB, TM.V, OTMN.PK, KRE.V, FR.V.  These are required disclaimers by the SEC: whether I’ve been paid, and what I own.   I believe the SEC intended this to be a cautionary note that I own these shares, not as a recommendation or endorsement.  I reserve the right to buy or sell any stock at any time.  I believe the SEC does not require a disclosure regarding finder’s fees.  Nevertheless, I receive “finder’s fees” from silver companies on occasion